The iPad has many uses for many different kinds of people. For some, it’s a fun and easy way to browse the web from the couch. For others, it’s a way to keep in touch with work on the go. The one function that nearly every user agrees the iPad excels, however, is in displaying video. Indeed, the iPad’s beautiful 9.7-inch high-resolution screen seems purpose-built for displaying video.

Users can fairly easily sync their videos through iTunes on their Mac and PC and share video across a number of devices, but there are a number of important limitations. For users who are much more limited in terms of their hard drive space, downloading multiple videos can quickly fill up the entire device. Even worse, iTunes places strict restrictions on the file type that a user can add to his library, leaving no way to enjoy videos in the tremendously popular .avi file format.

Stepping up to fill both of those voids is “Air Video” for the iPad and iPhone. What Air Video allows users to do is stream videos from their home computers straight to their iPad. There’s no need to synchronize videos and use up valuable hard drive space. Even better, Air Video supports nearly all common video formats, converting files on-the-fly and displaying them on the iPad screen.

Setting it up is fairly simply. First the app is installed on an iPhone or iPad. The user then goes to the Air Video website to download the server software for his Mac or PC. From there, the program can be pointed to specific folders on the host computer and it automatically sets up a remote server. Users can choose whether they want the server available simply over the local network or whether they want to be able to access it from the Internet.

From there, it’s a simple matter of plugging the provided Server PIN into the app, selecting the desired video file, and streaming away. You can track back and worth within a movie, with a minimum amount of buffering required.

It’s worth noting of course that the speed and video quality involved depend heavily on the Internet connections being used. Connecting over WiFi on a local area network provides much stronger performance than trying to connect remotely via 3G, and you can expect similar performance to other streaming video services like Netflix and Hulu Plus.

There is a free version of Air Video available in the App Store, but the full version, which allows you to view the full number of displayed items in each folder, costs $2.99.