My good buddy Alexander Pick is about to release the full Quake 3 Arena for iPad today, with on-screen key controls, like it should be. You can play offline and online, and add levels through iTunes.
It runs smoothly at 1024x768, even with the 4.2 beta, and it looks great, especially if you download the high resolution texture files from here. The only requirement: jailbreaking your iPad (which is easy and painless). The application should be available within the next few hours in Cydia. [Paduser]