Ah yes, I remember this. Worth noting that his device is a projector putting the image on a screen, and I think it's got a lot more computing power behind it than an iPad has available.
The current latency isn't a CPU issue though. I'm not sure of the refresh rate of the iPad (60Hz?) but the hardware has no trouble updating the display in a single frame.
It should be noted that unless Microsoft had a 1000Hz display running, there was something fishy going on with their 1ms update.