I used Calibre to convert the free Apple User Guide found on iTunes to a PDF file. I do not know what the DRM status of Apple's book; I picked it to run a random test. Will it work with all .epub books from Apple, just a few, or Bob was simply lucky, I do not know.
Calibre will convert to 15 or so formats including .pdf and .pdb.
After converting, I emailed the file to myself and opened my mail. I long pressed the attachment and iPad asked me "Open in . . ." I selected iBooks. After a short wait, the file opened in iBooks just fine
So I'll tentatively say yes, it Calibre can convert .epub books to .pdf files and those converted files will open on the iPad.
Now, I'll accept that perhaps there are no DRM issues because Apple might not have set it up with this specific book. I'll also say I might be lucky, and I'll accept that it might not convert all books from itunes. Their goal might be to allow the User Guide to be freely distributed so they relaxed something. Just a guess.
You might want to DL Calibre and try converting a paid book and see what you get. Free books from iTunes might be convertible where as paid for books are locked down much tighter and Calibre does not work.
So there you go, for what it is worth.
The odds are that the book you converted was not protected with DRM.
Because, AFAIK, there is no way to remove the DRM from an Apple e-book. So, in that case, you cannot use Calibre to change the file type or anything like that.
So far, if you buy an e-book from Apple, you'll have to read it with iBooks. Sorry.
Removing DRM is illegal in some countries, a gray area in others and completely ignored in yet more. It gets too close to morals, laws and piracy in discussion topics.
As this is an international forum - we here at iPadForums cannot allow any discussion of DRM removal tools.
It's just easier all around to make any such discussion an off-limits area.
Thanks for asking.