Okay, I have been having a bit of a look around and it seems like working with RAW files on iPad has come a long way since April last year...
PhotoRaw looks like it has some really basic functionality - it does it's job, but there's other options that do the same thing with more comprehensive editing features and even batch/automation features. But kudos to the developers, you can be sure it will read Leica DNG files since it was developed by a Leica user for what seems to be exactly that purpose.
Filterstorm Pro has got to be the app of choice if you're working with large numbers of photos. It does batch processing and automation, and I have not seen any other app that can do batch processing, let alone automation. So if you're using any other app you will need to export each photo individually as JPG if you want to upload them to Flickr for example. It does just about all the editing you could want to do on an iPad, including layers (!) and masking. Batch export to FTP, Dropbox, Flickr or email. You can also rate photos and maintain an actual image library, as well as apply watermarks. This one seems like much more of a commercial/business-oriented app, rather than a 'fun, social-sharing' type app.
Snapseed is another really popular app that supports RAW import. Scott Kelby really loves it... and I can see why. The touch interface just looks so intuitive, this is really what a touch device like the iPad needs. No wonder it was chosen by Apple as 2011 iPad app of the year... A plus for some people will be more 'social sharing' options like Facebook and Twitter in addition to Flickr. But the lack of batch processing, batch export makes it more suited to use for images that you know you want to edit, rather than just share straight out of camera.
These would be my top picks after some hours of research (it's never easy!). I'm sure they'll keep improving and I really hope that Snapseed brings batch functions in the next update because that would really complete it. I think I may have to buy both of these because Snapseed seems too awesome to pass up, but it would be a hassle to work with hundreds of photos without batch functions. They seem to be complimentary to each other right now.
One final thing - I think that both of these apps don't actually make the adjustments on the DNG file, I know that Snapdragon converts a JPG version if you import a RAW file (so you're actually working on a JPG), and I have a feeling that Filterstorm Pro might work the same way. PhotoRaw does seem to let you view and work on the actual RAW file, but you can see it's working hard and it can take a second or so to completely refresh the screen. But one thing that just seems like a current hardware limitation is that none of the apps will export edited RAW files, only JPG.
