I have never heard that inserting an image into a header is a bad thing; can you please explain why you say it's never a good thing to do?
As far as I know, this is a very common method and is the only way that I'm aware of to create a header with a company logo that will repeat on subsequent pages within the document. By making the image a background image, you lose this ability and the image will only show on the first page of the document.
To answer your suggestion, yes, making the image a background image will make it visible on the iPad however this is not the issue, as images within the body of the document do not have the disappearing issue that I'm experiencing with images in the header.
If inserting images in the header is bad thing, do you have another method that you could share that would achieve the same result; that is an image (logo) that will automatically repeat on every subsequent page that is added to a document?
Rather than get too deep into the philosophy of WP design, how about taking the graphic out of the Header and Making it a Floating Object. Place it exactly where you would have put it in the Header. The choose Format, Advanced, Move Object to Section Master.
On your Mac version of Pages it will appear on each page of the Section, just as it would if it was in the Header. Now see if it shows up beyond the first page in the iOS version.
Thanks Jerrold, I was just updating my comment as I found this method here: http://www.macobserver.com/tmo/article/pages_09_the_wonders_of_master_objects
This is exactly what I was looking for and I could not find it as I could not see past my years of experience with MS Word. I have to say that I look forward to playing with this feature as it seems to add a lot of flexibility.