Hi Jaecee,
I think that the Software Update was added in iOS 5. you may have to download the update via computer before you can do the over the air updates. If you are on four.point-something plug into your computer and update with iTunes.
When connected in iTunes click on your iPad, on the left hand side, and then in the main part of the window there should be a selection to update to the latest software.
Sent from my iPad using iPF - Peace