I would go for the pixel dimensions of the original iPad: 1024px x 768px @ 132ppi
Unless you know your PDF will ONLY be viewed on the newer iPads. The newer iPads will compensate for the resolution and it should look fine.
Even though this is for PDF, I think that's normally the way it's handled in a Adobe Digital Publishing Suite app. And anything with vector or type will scale as vector object, of course, do.
It's actually quite different for DPS but PDF for iPad is no different than PDF for desktop in this regard, IMO. Just make sure the image has enough resolution to look good since the user will be able to zoom in and out.
Now my issue has arrisen after I have tried creating a document in inDesign with the settings of 1024px x 768px @72ppi (default & unchangeable ppi settings).
While placed images do have a pixel resolution, Indesign documents do not. So, when you make a new document with the Intent set at Web or Digital Publishing you get pixels as the initial measurement units, but you are free to change them after the doc is created.
For measurement purposes Indesign assumes there are 72 pixels in an inch—obviously that's no the case for most monitors and tablets. The Link panel's effective pixels per inch reading is relative to the page dimension in inches. So, if you accept the iPad 1024x768 preset and change the measurement settings to inches you'll get 14.22" x 10.66" almost twice the size of the iPad's physical dimensions.
If I scale up a 264ppi image to fill the page on a 14.22" x 10.66" page I get an effective ppi of 144, but when the page is eventually displayed on the smaller 7.7" x 5.8" iPad screen the effective res will go back up to 264ppi.
I create my image which ive made large enough & dense enough to ensure quality at the top end iPad.
Also, if you use the iPad document 1024x768 preset you can multiply an image's effective ppi by 1.8332 to get the effective ppi when it's displayed at 100% on an iPad. For the iPad mini it would be 2.263.
Thanks for the great reply and to posts above.
Really useful information, I will put that to good use.