The refurbished iPads are ones that have been returned to Apple for refund and are likely to only have been used for a short period. However, a lot of people will still be put off by the label but there is a discount associated with refurbished products.
The products themselves have been through a stringent refurbishment process and will come with 90 days of telephone support and a one year warranty.
The discount you'll get for choosing a refurbished product is $50 , which might not seem like much but Apple would argue your getting the exact same product cheaper. Besides who will ever know you bought a refurbished iPad.
They are only currently available in the US, but we would expect Apple to begin offering them in the UK.