How To: Install iPhoto On Your First-Generation iPad
Works like a charm. And for your iPhone 3GS, too.
Since version 10.6 of iTunes you can stop syncing apps between your Mac and iOS devices without being prompted to delete all apps from the devices.
When you do that, the problem described in the article that you are prompted to remove iPhoto on every sync disappears and sync continues to work just fine.
Performance on the iPad seems to be normal. No problems so far. On the 3GS it is a bit slow when editing photos.