Based on the info on the Apple site, it seems you can't stream your iTunes library to your iPad while on the same network through Airplay? You can stream from iTunes to speakers, and iPad to speakers, but not to each other. Based on all of the videos of the 4.2 beta, it appears this feature definitely isn't there.
I feel like this could be pretty useful for smaller iPad models. It would be nice being able to stream my library from my couch without having to store the music on the hard drive.