Yes it works. As you can see, with a native USB compliant audio source (meaning one that requires no drivers), you can just plug it into the iPad Camera Connection Kit and record. In this quick and dirty test, you can see how easy it is to do it.
Also, you can listen to an MP3 of the actual iPad audio test recording. As you’ll notice there’s a bit of overmodulation which is really more of an issue with the source volume (me). If there was a decent audio recording app that had some sort of input volume control and/or compression, it would make a lot of difference. Also, the Plantronics headset I used is a fairly cheap one–the one I got with a copy of MacDictate–and as a result it’s a bit nasal-sounding but again, this is really more of a fault of the input mechanism than anything else.
If I get a chance I’ll hook it up to a cleaner source and see what happens but for now, consider the rumors true. You can record audio with an iPad!
*UPDATE
And yes, if you have an iPad and can’t see the video, you can watch it by clicking this iPad friendly video link
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Sounds better than the YouTube video’s audio. Thanks for posting!
Tim- Yeah, I didn’t use my lav mic in the video just the built in mics on the front of the camera. Most of the time I was standing behind or next to the camera out of the shot so what you’re hearing in the video is mostly reflected off the hard surfaces all around my desk.