How many photos fit on a 32GB iPad?

No idea.
But I decided to just move mine to network disk and just connected the ethernet cable to the wireless router and download with good reader and air share apps.

The size might just be small percent of the iPhoto lib but you just may have to run a test.

I moved 8400 photos, totaling 30GB to my iPad, and it took up just over 6GB, or about 20%.

Wow! From 30gb down to 6gb. That's impressive compression. What's your sense of how the photos look on your Mac vs. the iPad?

Does this mean the iPad automatically compresses picture files, and if so is the compression reversable ? - or one way only ?

The photos look great on the iPad, and there is not a need to worry about the reversal of compression, as photos only travel one way, and that is from iTunes to iPad. Photos brought to iPad from other sources are not compressed, and can be transferred back to iTunes, or deleted. To delete photos previously transfered required de-selecting them in iTunes sync. I hope this makes sense.

Compression is not reversible. If it were there would be no reason for uncompressed pictures. I know that if import a photo directly via the camera connection kit it does not compress the files. It even imports the large RAW file format of cameras.

I think the iPad may compress a file imported via syncing since the iPad can only display so many pixels and you can't really manipulate photos on the iPad .

When syncing photos through iTunes, the software "optimizes" the photos for viewing on the iPad.
When you import photos through the camera connector, they are not reduced at all and will be exported to your computer the same way.
But, to answer the original poster, I would assume that even with the compression being done during the syncing, the actual amount of photos would still depend on the size of the original photo file sizes, so (as the commercials used to say) your mileage might vary.