I am trying to install update but it is asking for a pass code that I never set

It is the passcode you use to wake/unlock your ipad.

The passcode is the four digit number that you enter after an Autolock on your device or when you first turn it on. If you can't remember that code you'll have to restore your iPad before you can do the update.

http://support.apple.com/kb/HT1212

Hi,

It is the password for you lock screen. It is a new feature Apple added in the last update.

Regards.