One of the new iOS 5 features quickly touched on by Apple yesterday in its iOS 5 introduction was AirPlay Mirroring for the iPad 2, enabling users to wirelessly transmit the on-screen content of the device to an Apple TV for display on a television. The iPad 2 currently supports display mirroring via a Digital AV Adapter that provides a wired connection to a TV via HDMI.
One of the criticisms of the wired mirroring has been the cumbersome nature of the dongle and cable hanging off of the end of the device, particularly when it comes to games and other apps that require movement of the device for input purposes. Consequently, AirPlay Mirroring should be a significant boon to those looking to display their iPad content on the larger screen, especially if lag is minimal.
While the AirPlay Mirroring is a fairly basic concept in principle, this YouTube video is still an interesting look at the functionality:
And while the video does not directly address how much lag there is, the poster notes that the feature "works beautifully".
Update: And here is another video: