I've written a white paper on how to compress web content for viewing on the iPad. This one took some research as there's not a lot of comprehensive information available at the moment.
In learning about the H.264, I discovered that Apple doesn't give the user much access to many of the codec's options. In fact, Apple's flavor of H.264 is not used by anyone else on the market. More common versions, like MainConcept, are used by Sorenson's Squeeze and Adobe's Media Encoder.
MediaStom Guide to iPad Compression for the Web is available for free on the MediaStorm blog.