It seems to me that the main difference between the two is the ISO setting. The iPad2 photo is rather grainy, but rather clear. The iPhone4 photo is less grainy

It seems to me that the main difference between the two is the ISO setting. The iPad2 photo is rather grainy, but rather clear. The iPhone4 photo is less grainy, but instead it's blurred because of shaking hands. You can imitate this by setting your camera at a low and then a high ISO setting - same result. It doesn't necessarily have anything to do with the hardware.