You can use the iPad as a dedicated picture frame. The button in the settings most likely lets you configure the slideshow settings (i.e. transitions, which albums to use...)
Incidentally, the screenshot shows the colors inverted (it's showing off the accessibility features), but if you invert your screen while looking at it, you see the original colors, but you also get an idea of what a white iPad would look like. I have to say, I really like the way it looks. I'd love it if they released a white version of the iPad.
For those who want to try that, just press Cmd-Opt-Ctrl-8 to invert your colors (press those again to revert back to normal).
Incidentally, the screenshot shows the colors inverted (it's showing off the accessibility features), but if you invert your screen while looking at it, you see the original colors, but you also get an idea of what a white iPad would look like.