No contract required. Apple will release iPad models that are Wi-Fi only, but if you want 3G service using a cellular network, AT&T has your data plan.
The company is offering iPad owners 250 MB of data for $14.99 per month. Unlimited data will be offered for $29.99 per month. Everything gets activated and pre-paid right on the iPad. No contract means you can cancel anytime.
Free use of any AT&T Wi-Fi hotspot is included with both data plans. Apple is working on securing similar wireless data plans for countries outside the US.