Apple just announced the terms of the deal for the iPad. Provided your iPad hasn’t gone through some catastrophic amount of damage “as result of an 
accident, liquid contact, disassembly, unauthorized service or unauthorized modifications,” suggests Apple then you’ll be eligible to take advantage of the company’s battery replacement service.
It will cost you $99 (plus $6.95 for shipping and whatever your local tax happens to be). When you send your iPad off to Apple, you aren’t just getting your same old iPad back in the mail after one week or thereabouts. Opting for the company’s battery replacement service will basically put you on the list for a refurbished iPad although the exterior case of the device will be brand-new, the underlying product will be one that’s gone through Apple’s fix-it procedures in some capacity.
When Apple receives a device for battery replacement, it essentially sticks the product in a “to be fixed” bin. In order to guarantee a rapid turnaround time for the iPad you’ve sent in, it’s easier to grab an identical item that’s been previously fixed off the shelf and send it your way. Once your device is fixed, it’ll go in the waiting line for someone else suffering from a near-dead battery. You’re not paying Apple for a refurbished unit per se; you’re paying for the entire process.