You wouldn't want to use this for anything motion-intensive, but as a place to keep your Twitter and IM clients, or even as an extra screen for something like Photoshop Lightroom, it is ideal. If you quit the app to do something else, the Mac resets back to a single screen, but if you get push-notifications they pop up on the iPad as normal, and you can tap to dismiss as normal. Touching is a little freaky, as multi-touch gestures don't work. The touch screen works, although you can mouse into the space as well. Better, in fact, as the iPad has a pretty high-resolution screen. Once it is settled, though, after a second or so, the image is as clear as you'd expect. Watching videos on the iPad screen is choppy, and if you drag a window across it then there is a delay and the image pixellates somewhat.
Because this works over the air (both machines need to be on the same Wi-Fi network), there is some lag.