It seems to have fixed one issue for me. The iPad was fine at home with my Airport base station so that was never a problem, but when I went to the local coffee shop and used their WiFi, the connection would drop repeatedly, every few minutes. This unfortunately canceled the access code they gave me, which you can only use once. Thus, the iPad was essentially unusable there. I have used my Mac Book Pro and iPhone 3GS in the same location, with no problems, so it was definitely an issue with the iPad.
So after updating iOS, it's working perfectly. I've been on for several hours with no drops, which was not possible before. Furthermore, I'm showing 2-3 (out of 3) WIFi "bars", whereas before it would never go above one. Whether this is actually improved reception or the update simply changed the display or scaling of the bars (as in the iPhone update), I don't know. But it works, that's all I care about, so I'm happy.
Furthermore, on a side note, the cacheing of pages in Safari seems much improved with this update. Now bring on iOS4!
EDIT: It also keeps my connection (and a valid access code) if the device gets turned off (slept). Before the update, it would demand a new access code when I woke it up before I could use WiFi.