Many developers love to use the phrase "Compatible with iPad" when advertising their apps, but usually it's misused. I say that when an app is truly "compatible" with Apple's iPad, it is optimized for it. That said, I've tried many iPhone apps on my iPad and they've either crashed or they look horrible on that big screen. It's so annoying to see developers tell people that their apps work with iPad, but instead it's just a bit iPhone app. (Journalists and analysts initially said that the iPad would just be a bit iPhone, but it has proved to be much more than just that and is indeed a revolutionary device.)
In any case, this misleading nonsense that developers spread 'round is just plain wrong. If their app works with the iPad and uses its full potential, then great: it is compatible with the iPad. If not, then be quiet and stop saying that it works with the iPad. Pixelation is grotesque and not many users of a quality, polished operating system such as iOS are accustomed to such "compatibility."