Started streaming video via Plex to my iPad4 last week. Encountered this dynamic gamma/contrast problem, found it extremely annoying, searched the internet for a fix, discovered this thread and registered to the forum this morning. I've been using Apple products for ten years and never had cause to complain before, save waiting for a Google app before upgrading to iOS6.
Colour grading video is a part of my job, so this fairly leaped out at me. On my device, the problem of pulsing gamma/contrast effects all video streamed to the iPad in Plex, whether a bright or a dark scene and regardless of the brightness of the iPad. It pulses regularly, at 5-10 second intervals and, for me, makes the video unwatchable. It is however more obvious / severe in scenes with a dark background and bright foreground, particularly shots that are held for any length of time, or when subtitles are being displayed. It should go without saying that I have auto-brightness turned off. When using BBC iPlayer (I am based in the UK), there is no problem, suggesting to me a software issue, a dynamic contrast feature gone wrong - although I suppose it may also be an interaction between the software and certain models of (LG) display. This might also explain why recently-purchased iPad 3s, which also use the LG Displays, have been reported with the same problem whereas older builds of the iPad 3 do not (just a thought). Nb. streaming the very same video via Plex to my iPhone 4S is problem-free.
Inevitably, some people are going to be more sensitive to this issue than others, just as some are happy to watch their TVs in the incorrect aspect ratio, or without adjusting the showroom brightness settings. If you use apps that are unaffected, or if you don't use your iPad much for watching full-screen video, or if you tend to watch content that is bright and/or fast cutting you may well not see the problem. It is also possible that some batches of iPad 4 contain a different make of screen and are unaffected. I think, however, there are now enough responses to this thread to demonstrate that it is not a rare or isolated issue and also that replacing with another iPad4 or new iPad3 is unlikely to provide a solution.
The bottom line as far as I'm concerned, whether this "feature" annoys every customer or not, is that to implement dynamic contrast/gamma in such a supposedly high end device without the option to disable is unacceptable. I suppose I'll wait for the latest update to iOS - will also contact Plex to see if there's anythign they can do to fix the issue - and if that doesn't solve the problem will have no choice but to demand a refund from Apple. Suggest anyone buying an iPad for the primary purpose of watching video proceed with caution.