Wired just published a review of the application. Look very promising.
The application look fast and responsive. The UI is not up to my taste with the oversized video thumbnails but I am sure it will get better over time (if it is ever approved in the App Store). Given the published guidelines yesterday I don’t see why it would not be the case.
VLC for the iPad will allow owners of the tablet to watch the non h264 compressed video on the platform. This will be a welcomed change for people who might have built of library of movies compressed in the older video formats.
Merging VLC for the iPad and AirVideo would provide the dream streaming video application. No more need to transcode non h.264 video to watch over WiFi. Only transcoding when streaming over 3G would be necessary.