Duet Display is probably the most promising option, but IIRC it's a paid app on the iOS side. So far the best one I found was called Splashtop XDisplay. That one uses wired connection and supports iOS 7 and up. It works okay, totally free but it can't handle the 2048x1536 res very well, the framerate is very low. 1024x768 works almost perfectly, I can even watch a YouTube video pretty smooth on it this way. It does look pretty pixelated though.
2048x1536 makes the text look tiny since it doesn't scale like a Mac Retina display, but for certain things it would've been useful. Just out of curiosity I pulled out my cracked iPad 2 and tried it, works near perfect for most uses with this app. To my amazement, the app allowed me to use the iPad 2 at 1280x960 resolution, which is higher than the native panel resolution. It works perfect with this res, not too much lag added either. This seems to be the best use case for this app. Even fired up a few old games I had (Oblivion for example) and it was actually pretty smooth overall, lag was all from the main computer.
The app also lets you use the touchscreen as a mouse cursor, although it doesn't work the greatest. This may or may not interfere with some apps, for example when I played Oblivion the mouse cursor in the menus was all jerky when I had the iPad plugged in. I may buy Duet display and see how laggy it is in comparison, because ideally I would like to use it at 2048x1536. Will test YAM out too tonight, just curious to see which one is best. I wish Duet had a trial mode.