Real resolution of rotation problem
I too had the problem of the mail app no longer rotating in the iPad after installing an OS update. Resetting the iPad did fix it temporarily, but the problem always came back. I talked to Apple about it and they suggested that the problem was due to some sort of interaction with another app.
This was proven to me when I replaced my iPad with a new iPad 2 and had the exact same problem.
The solution? I installed iOS 4.3.2 the other day and, lo and behold, the problem is gone! Guess it was some kind of bug in the OS that has finally been corrected.