How to Reset iPad to Factory Settings

If you want to delete everything from the iPad before selling it on eBay or if you wish to reset your iPad to the default factory setting, here're the steps:
Resetting iPad (from the iPad help file)

Reset all settings: Choose General - > Reset, then tap Reset All Settings. All your preferences and settings are reset. Information, such as your contacts and calendars, and media, such as your songs and videos, aren't deleted.
To erase all content and settings, choose General - >Reset, then tap "Erase All Content and Settings." This resets all settings to their original values and erases all your information and media.
If you simply like to reset the Home screen layout to the default setting, choose General -> Reset, then tap Reset Home Screen Layout.