You still have the encoding issue.
Yes it may stream but unless you can test this, my bet is like others before you, the encoding is not what the ipad can decode. See if VLC PLAYER is out for the iPad and see if the camcorder video and audio encoding matches the video players.
BTW, I own a Kingston WiDrive and it's in FAT32. However my bet is that the video encoding will cause all this to fall apart.