That explains it. You can't update your iOS from the iPad unless you are already at least on iOS 5. You'll have to connect your iPad to iTunes on your computer and check for the update there. The update has to be initialized from iTunes on your computer,
Here's a thread that might help. Update the iTunes on your computer to the latest version, then follow the directions in the thread. http://www.ipadforums.net/ipad-help/49411-ios-5-5-0-1-upgrade-troubleshooting.html
Here is a link for downloading iTunes 10.7 to your computer. Go to this page on your computer to download iTunes. http://www.apple.com/itunes/