The iPad currently has a screen resolution of 1024×768 pixels. It is good, but probably not enough for a 9.7-inch device, especially since the pixel density is relatively low at 132 ppi (pixels per inch). However, rumors indicate that this may change in the upcoming iPad 2. The device may double the resolution, similar to what iPhone 4 (960×640) did over its predecessors (480×320). If this is true, then the iPad 2 will likely have a screen resolution of 2048×1536 pixels.
There are rumors too about the iPad 2′s graphics/rendering power. It seems Apple may be bringing in some powerful GPUs and also upgrade its CPU from A4 to A5.