Yes, the iPad has a built in compass in the same was as the latest gen iPhone. It works pretty well although I have not tested it against a properly calibrated compass.
I have used my iPad now in the sunlight and outdoors lighting conditions and can report it is very much better than I had thought it would be. It is not quite as good as the iPhone display but is as good if not better than say a TomTom. In anything other than direct sunlight it is very good indeed.
I reckon if you could load something like PocketFMS it would be more than adequate for navigation. I always worry a little about devices with in built GPS and without the ability to attach an external aerial. Whether it would suffer from interference would need to be tested although I also found that its ability to acquire satellites (even in the house) is better than any other GPS I have used (for example my Garmin will not acquire any satellites in the middle of the study).
Surprisingly I reckon the screen is as good as a Motion computer and the batery life is excellent - I can well imagine over six hours of continous GPS useage and a lot more for other applications.
Worth buying for the cockpit? Yes, I think so. My cockpit is all glass so I am in no rush to have another glass screen on my lap, but from my point of view very useful for all the other gizmos relating to flying I keep on my notepad at the moment which will be consigned to the bin as soon as there is a NOTAM app for the iPad.