Hah, just discovered something useful.... you can put an iPad (or iPhone, iTouch, and presumably other devices with capacitive-touch displays) in a zip-lock bag, and can interact with the multitouch right through it. Put in the iPad from the bottom, zip it up, and you should be good to go even in a downpour. This'll be convenient for when I use the mapping features on my iPhone while scootering, and to give added piece of mind while reading with the iPad while relaxing in the bath.
It'd also be useful to protect against particularly grimy hands, such as when entertaining toddlers, or perhaps for grease monkeys referring to an iPad or answering an iPhone while tuning up the car.
In a heavy rain, the raindrops themselves can interact with the screen, so some care is required along those lines. Also, you can't use it underwater because then the entire surface of the device is being interacted with at once, so it essentially shuts down. I tried it.
I don't know whether the lack of ventilation would matter for long periods. Heat is transferred through the bag easily, so that doesn't seem to be a concern.