Question, does the iPad play games that support iPhone 4's native res at 320x480 as well?
Yes, it does. It also don't use the retina graphics as it doesn't check for the @2x suffix at the end of the graphic files (just checked it with my own project, running iOS 4.2.1)
Shitlord by trade and passion. Graphics programmer at Laminar Research. I write blog posts at feresignum.com