Need help setting up second Ipad.

Yes. You can always keep purchased apps as long as you use the same Apple ID that you used to buy them with originally. You can download them again to another iPad for free.

I'm curious as to why you would want to set up the iPad as new, though. You can backup the first iPad with iCloud and then restore the new iPad from the iCloud backup or - you can transfer purchases into iTunes, backup the iPad, sync with iTunes and then set up the new iPad from the iTunes backup, sync with iTunes .... And all of your current content will be on the new iPad.

I just set up an iPod Touch from and iCloud backup a couple of weeks ago, but I also synced with iTunes as well, since most of my music is not purchased (riooed from CD's) and I had a number of photos that I synced to the original iPod that I wanted to sync to the new iPod Touch.

In that case, there is no need to set it up as new. You can keeping using both iPad and they can both have exactly the same content on them, if you want them to be identical. I would imagine that the kids will get the old iPad now and you can keep the new one as the "adult" iPad and you can do as you see fit with it!

How to Transfer Everything from an Old iPad to New iPad

http://osxdaily.com/2012/03/16/transfer-old-ipad-to-new-ipad/

 Cheers, Tom 😉