This applies to iOS v 5.1 as of March 19, 2012:
Click General > Usage (3rd button in the 1st block of buttongs that includes About & Software Update). Give the iPad a moment to load the list of Music, Video and Apps that are stored on your iPad.
You will see a list of 10 of the largest Storage users. While you can't manage the Music directly (that is done from iTunes by checking and unchecking selections to sync) you can manage individual audiobooks under Music as well as TV Shows, Movies and Music Videos by clicking on Video.
Following Music and Video you will usually see a list of the installed Apps and how much room they are taking in your Storage. You can delete the Apps and their associated documents by clicking o hte name of the app.
Your iCloud storage is in the block following. Don't confuse this with the storage of your iPad. iCloud stores the documents and data associated with your applications, but your music and apps that you acquire through iTunes Store are stored on your iPad and are synced with your Mac storage.