Can I use the camera connection kit to transfer photos between a USB and an iPad?

If the USB stick (not USB drive) doesn't require too much power, and if the photos are named in a particular format then you should be able to : you will need to create a DCIM directory off the root of it with the photos underneath, and the photo filenames need to be exactly 8 characters long (no spaces) plus the file extension i.e. in a similar format as if a camera had created/written them.

I frequently use this method. You can use a USB flash drive & the camera connection kit.

Plug the USB flash drive into your computer & create a new folder titled DCIM. Then put your movie/photo files into the folder. The files must have a filename with exactly 8 characters long (no spaces) plus the file extension (i.e., my-movie.mov; DSCN0164.jpg).

Now plug the flash drive into the iPad using the camera connection kit. Open the Photos app, the movie/photo files should appear & you can import. (You can not export using the camera connection kit.)

 Cheers, Tom 😉

You can't copy photos off the iPad with the kit, you can only copy photos/videos to the Photos app with it. If you want to copy photos off the iPad then you can use your computer : http://support.apple.com/kb/HT4083