Was able to try and interesting comparison a few days back.
Had my iPad 1 and my F/Os iPad 2 running concurrently with Ozrunways. The iPad 2 picked up and held the GPS signal quite easily on top of the dash. My iPad 1 never picked up the signal at all.
It appears the solution is self evident- I need to go and buy and iPad 2!
That said, if he put his iPad down by his side then the signal became a lot more squirrelly. I'm still going to go with option A and get a bluetooth GPS for it. I reckon that's going to be the best solution for the 767. At least that way I can leave the iPad beside me rather than having it up on the dash the whole time.