One of the chief purposes of the iPad is to act as a mobile media and entertainment system. Set your dad up with these apps so he is ready to kill some time on the go.
Kindle (Free) - The Amazon Kindle has changed the way people read books. Amazon recently revealed that electronic Kindle books have outsold paperback and hardcover books combined. With the Kindle app on his iPad, dad can carry his entire library of fiction and non-fiction with him and be ready to relax with a good book no matter where he goes. Although the Kindle app is free, you might want to help dad out with an Amazon gift card or something so he can get some books to use with it.
Netflix (Free) - Maybe your dad is the kind who isn't a big reader, and would just rather wait for the movie. In that case, the Netflix app can give dad access to a comprehensive library of movies and TV shows ready to be streamed instantly to the iPad. Like the Kindle app, though, the Netflix app is free, but it is useless without the content to go with it. If dad doesn't already have a Netflix account, you will need to set him up with one to go with this app.
Tetris for iPad ($0.99) - Tetris is one of the greatest, most addicting games of all time. For less than a dollar you can give dad the gift of endless hours of entertainment. Dad can consider the dreams of falling blocks that haunt his sleep an added bonus.
Angry Birds HD ($4.99) - If you want your dad to be cool, then you have to get him clued in on the Angry Birds craze. Make sure you help dad out by explaining that the different birds actually have different attributes and that there is some strategy to how you use them. If he runs out of pigs to squish, you can always point him toward Angry Birds Seasons, or Angry Birds Rio.
And, finally an app that almost every dad needs, but doesn't fit into any of my categories--iSteak. If your dad is barbecue-challenged like I am, he will certainly appreciate this $1.99 app that will help ensure he grills the steak perfectly every time. iSteak is actually an iPhone app, but it will work on dad's iPad as well.
Of course, if your dad doesn't yet have an iPad, then buying him the tablet itself would make an excellent gift. Or, if your dad already has an iPad, and loves retro-arcade games, perhaps an iCade is the way to go. But, loading up his iPad with these apps is a great (and economical) way to say "Thanks for all you do".