It does work with the ipad (just tried it). However, currently sold iPads do not have 3G/GPS. So the location service only works if they are connected via Wifi. It uses the same Wifi location service other Apple products use (accuracy varies...). Once the 3G iPad comes out later this month, it will likely work just like the iPhone as long as you have a valid 3G plan for your iPad

One tip: try the "Find my iPhone" feature once in a while to make sure your phone is configured right to use it before loosing it ;-)