How to update iPad 2 over wifi?

When you plug your iPad into iTunes there is a tick box option to allow for syncing over WiFi, which means you do not need to plug your iPad in to take a backup or copy Apps/Music etc over to the iPad, when iTunes is open.

You will not be able to update the iOS over WiFi until you upgrade to at least iOS 5, which you would need to do when plugged into your computer and via iTunes.

Once iOS 5 and above is installed the iPad will let you use it without a computer, upgrading the iOS, syncing etc (once that tick box is selected).

You must have IOS5.0 on your iPad to update over the air (OTA)