I do have an iPad and I tried your settings for you. iTunes would not sync the file to the iPad and returned “… the movie was not transfered because it cannot be played on this iPad…”
On the other hand, I have been using:
H.264, NTSC, 1024X768p, 29.97
Baseline, Level 3.1, VBR 1Pass
Target 2.04, Maximum 2.31
AAC, Stereo, 48kHz, 128kbps
MP4 multiplex, iPod stream
The iPad plays this just fine and the quality is very high. I have not tried to go higher to see what’s the absolute highest quality I can get because this is quite good and I don’t want to have a larger file size, but if you have something else you want to try, email me and I can test it for you.