When it comes to the ipad, the processor in the device is rather limited. The ipad is passively cooled, and battery driven, so the processor must be underclocked to save energy and keep it from burning up.
Video decoding is therefore usually done by the video card, and not done by software. The hardware decoding is limited to a few formats [1], but any format can be decoded in software if the developer adds support for it.
But because of the limited hardware and limited memory not all formats can be decoded in real time, e.g. high definition video: some formats are simply too demanding to decode by software.
[1]
http://www.ipadintouch.com/the-compl...-video-format/