In 2010, Apple launched the iPad 1 tablet and then the company introduced a system that allowed users to double the image resolution of iPhone applications in order to run them on the tablet. In practice, an application for iPhone/iPod Touch could be run on the iPad in the so-called 2x mode, which practically doubles the resolution of the graphic elements and displays the application on the entire screen of the iPad tablet, although from a graphical point of view everything was displayed at a very low resolution. This system has been around for 2 years and for the iPad 3 it allows users to use Retina applications for the iPhone and display much better graphics than the versions specially made for the iPad.
I just tested this with NBA Jam, which the iphone version looked like crap on my ipad 1, but looked great through retinapad when I had it jailbroken since it was tricked into loading the iphone 4's retina enable graphic assets. Now, on my brand spankin' new ipad third gen, it looks fantastic, without retinapad, just by enabling the 2X option at the bottom right of the screen.
Specifically, the iPad/iPad 2 version of an application will be displayed on the iPad 3 with native graphics, as you can see on the left side of the image above. The iPhone Retina version of the same application will be displayed with much better graphics in 2x mode on the iPad 3 and the middle image is proof of this. The Retina version for the iPhone run in 2x mode would display almost as good graphics as the Retina version specially made for the iPad 3 tablet, so if you have to choose between an application for the iPad and a Retina one for the iPhone, then for the iPad 3 choose the Retina one for iPhone because the graphics will have a much better quality.
Universal apps should only be displayed with the iPad resolution, so you won't be able to force the display of high-quality graphics on the iPad 3 even though they exist for the iPhone 4. What Apple has done is very complicated but very smart because we can use Retina apps for iPhone directly on the iPad 3 tablet and the graphic elements are much clearer than those in the applications specially made for iPad 1/2.
