What is the use of the Bluetooth on iPad? I would like to understand what other ways I can use Bluetooth on my iPad apart from connecting a physical keyboard.
You can do peer-to-peer networking on bluetooth with some games and other applications.

I haven't checked out the details but my understanding is that the Bluetooth profile is much better in the iPhone 4 and iPad than in the early iPhones. I expect you could also hook up to BT headphones and speakers to stream music.