I have wifi sync working now. I don't know what I did to fix it. I did the following and it started working:
Connected my ipad2 to the latest release of iTunes on my W7 laptop with USB cable.
When iPad2 connected to iTunes I turned on "sync using wifi" and clicked DONE.
Did a sync. Clicked DONE.
Disconnected. Powered off iPad2. Powered off Laptop. Restarted my router.
Powered up iPad2 and confirmed wifi was working.
Powered up laptop, started iTunes.
The iPad2 now shows up in iTunes. Did a sync. Clicked DONE.
I thought I had tried the same procedure previously,
but it (up until now) didn't work. Go figure.
Bob Helms