Good news! Just received this response from Overdrive Media today re: DRM protected epub and PDF books. Be sure to follow the link to the video.
Thank you for your interest in OverDrive!
The Apple iPad runs a version of the iPhone OS so it has the same
compatibility with our formats as the iPhone. Both MP3 and WMA
Audiobooks may be transferred to the device using OverDrive Media
Console for Windows. MP3 titles can also be transferred to the iPad
using OverDrive Media Console for Mac as well. Also, MP3 Audiobooks may be downloaded directly to the iPad if using it with OverDrive Media
Console for iPhone.
At this time, the iPad does not currently support the DRM protected
eBook formats (Adobe PDF, Adobe EPUB, Mobipocket) provided by
OverDrive. We are working on an app that will be released in the near future. Beginning in December 2010, you will be able to enjoy eBooks and audiobooks on the iPhone in a single app! iPad & Android apps also coming soon.
To learn more about the app, you can read about it and/or view a video by going to the Sneak Preview: OverDrive eBook app for iPhone article on the OverDrive Digital Library Blog:
(I can't post the link because I'm new here) so ....go to Digital Library Blog, Overdrive Sneak Preview, Overdrive eBook app for iphone
The discussion following the video states that this will be a free APP, the book will download directly to the iPad, and there will be no need for Adobe Digital Editions.