Does "erase all content and settings" reset my ipad to its brand new states?

Yes, that restores it to 'new in box' state.

If you are using a PC or Mac equipped with iTunes, you can put your backup on your computer that way when switching to a new iCloud, when your iPad gets wiped, you can put the data back on.

If you manually manage your iTunes media (which is what is useful for those who share iTunes accounts) what you should also know is that "content and settings" get saved in a backup which are everything except music, videos,and apps (not app data, which is good). This means that when you put your data nack on your iPad, you will have to manually put your music and videos back on and you will have to manually redownload all of your apps either from the App Store or straight off iTunes on your computer to save time. I recomend you take screenshots before you wipe the iPad that way you can remember where you placed your apps if you have a lot of them. The good news though is that the apps should have all of their data after you redownload them if the backup was made correctly.

If you don't understand some of the things I am saying, please take the time to look up how to preform backups and retore from backups.

Erasing all content and settings will restore the iPad back to factory settings. If you do erase all content and settings - you will have to activate the iPad all over again - just like you did when you took it out of the box - just like Skydiver stated.

I have serious prob! my roommate has PHD in computers and I believe he is hacking into my devices. I don't know why. NOSEY I guess. I was informed by the other R/M that he is tracking my iPad and my cellphone. I have brand new samsung galaxy s4 active and my ipad2. if I do master reset on both will it get rid of any malware or programs that were installed? and if so how do I prevent him from remotely reinstalling them again? I'm sure I sound pretty dumb but I really don't know computers too well. obviously! any help would be appreciated!

I have no idea about the Samsung, but unless you have jailbroken your iPhone (or handed it to your roommate for a long enough time for him/her to have jailbroken it), you do not have any malware on it, and apps cannot be remotely installed.

Settings, passcode. and set a passcode to access the device. That means everytime you turn it on and try to use it even you need to enter the code to access the device.

You can also go into restrictions and enable them and lock out the ability to install anything. It does mean you'll need to enter your restriction code to add anything, but so will anyone else.

Juts don't forget these codes. Because if you do the only way out is to wipe your device.

In your case, Erase content and settings should fix the problem your met. However, for secure reason, means there are a lot of private and important data stored on your iPhone, this method is not as secure as others, such as using iPhone erasing app, which overwrites digits to existing data. Then all of the data is under safety. What's more, none of the data recovery program is capable of restoring any data from the iPhone.