A SIM card and a Micro SIM card, the latter being the only kind that an iPad will accept, are different shapes. It's the same technology, yet one will not fit in a device designed for the other.
As Engadget explained back in January,
...From AT&T's perspective, this is better than a software lock in some ways -- you're not going to be able to download a hack that gets you on another network, so you're totally at the mercy of your carrier at choice for providing a compatible card. Intentionally evil? Perhaps not -- all standards have to start somewhere -- but it's an awful pain in the ass.
Tech expert, reporter and entrepreneur Henk van Ess noticed that the difference between a SIM card and a Micro SIM is just 15 x 25mm versus 12 x 15mm. He then came up with a gadget called Cut My Sim:
Yep, you can guess what it does. And if you do decide to cut your SIM down to Micro size, then have regrets, van Ess' "Back to Normal" card fixes it for retrofitting.
Cut My Sim costs $30, roughly what an AT&T Micro SIM will cost you after taxes and delivery. The difference is DIY, and spending that $30 on an entrepreneur rather than AT&T.