If you want to view and markup PDF's on your iPad I would highly suggest this app. It is not free but as with most things you have to pay to get an app that is this powerful. Currently the app costs $4.99 and that price is a great deal.

The app is very easy to use. Just download a PDF into the app either from sources like your email account, server on a network, URL on the internet etc. Once you import into the app you can organize into a folder in the app or just leave in the main file folder. The app has a search feature to find file,  a preview option to look at the file before you open and many more options.
GoodReader not only supports massive PDF and TXT files, but also handles the most popular file types:
  • MS Office - .doc, .ppt., .xls
  • iWork ’08/’09
  • HTML and Safari webarchives
  • High resolution images
  • Even audio and video!

You can visit the developers website here: http://www.goodreader.net