Well, the good thing is that the epub format used on an iPad has good support for utf-8, so its quite possible to create books in Hindi/Urdu, and read them on iPad. However, the rendering of an Urdu book I created as a Proof of Concept was too slow to be of any use, and while the ePub format supports RTL (Right to Left languages), iBooks doesn't.
Without RTL support, Arabic/Urdu/Hebrew books are ruled out on iPad. Hopefully iOS4.0 would change this. As far as the rendering goes, I had all the content in a single file, so I suppose breaking it down into multiple files might have helped.
If anyone is interested, I used an online service to generate the epub from an html (although Calibre will work equally well). Then I expanded the generated epub file using zip, and edited a few things (including the RTL styling for text, so pages are turned from left to right), and compressed it back to ePub. It didn't work, but at the end of the day, its good to know ePub is only a zip file compressed with a few special options.
