The confusion with Messages on the iPad is that a lot of people expect it to work just like SMS does on a Phone. SMS is a phone based service, and only SMS works like SMS. On the iPad Messages only uses iMessage (Apples' chat service), not SMS. At least for now.
Other messages service (like iMessage) require an internet connection and the same (or compatible) app on each device or computer. Messages is that kind of app, and since the app is only available on Apple computers and devices it's somewhat limited. Just like FaceTime.
There is a bit more confusion in that the Messages app on the iPhone can use both SMS and iMessages (because it's a phone). It can be configured to use the most efficient service, depending on who/what you are trying to communicate with.