I know this is an old thread but it might help others..
BTW this method will let you control any idevice with any idevice (not just control ipad from iphone)
Ok lets go!
First you must have your both devices jailbroken.
-1 install BtStack mouse on the controlled device (FREE), this will lets your device connect to a bluetooth mouse, magic mouse for example..
-2 now install webe++ from cydia on the controlling device (srry 4 my English) this will make your controlled device or even your mac think that it is a BT mouse.
PS: the webe++ app is not for free.
3 then open both apps, BTStack will look for devices, and you would've already opened the webe++ app that has a "start" button that will start the virtual mouse
Hope that i helped someone and again sorry for my English