[gojomo]

Yes. From <http://www.apple.com/ipad/specs/>:

  Input and output
    * Dock connector port
    * 3.5-mm stereo headphone jack
    * Built-in speaker
    * Microphone
    * Micro SIM card tray (Wi-Fi + 3G model only)

It's likely the headphone jack is even iPhone-compatible (accepts headsets with inline microphones), though the wording above isn't clear.

[cpr]

It is compatible.

See http://www.macintouch.com/reviews/ipad/faq.html, question "Does it work with Apple's remote earphones?".