Here is a little info
"Video mirroring and video out support: Up to 1080p with Apple Digital AV Adapter or Apple VGA Adapter (cables sold separately)"
In any case, all of the A4/A5-based iOS devices can (unofficially) decode 1080p video but for quality results you do need the iPad 2 (the iPhone 4, 4th generation iPod touch, and the original iPad can decode some 1080p sources but you may see dropped frames or stuttering on those "lesser" devices).
As for creating 1080p content you can use whatever tools you want (just select 1920x1080 as the dimensions, use an H.264 codec, and restrict the bitrate to something between 4 to 10Mbps -- you may need to experiment with the latter to find the best results). However, you MIGHT need a third-party app to actually transfer and play that content on your iPad since iTunes MAY not allow you to directly sync that file to your iPad (because it exceeds the "official" spec).
indicate 480p/576p. for the component cable
The article that Keiichi_H ssay for the Digital AV adopter (as you knwo)
Video output specifications
iPad 2 or later and iPhone 4S support video output up to 1080p. iPad, iPhone 4, and iPod touch (4th generation) support video output up to 720p.