Under the Apps tab in iTunes (when your iPad is plugged in), you should be able to sort your applications by type, using the dropdown box above the list of apps. I believe you can then move down the list with your arrow keys and press the spacebar to check/uncheck the ones you don't want. It's not quite automatic, but I think this may be the fastest way to do it.
(I can't verify 100% the key presses here; I'm on a machine right now that doesn't have iTunes installed.)
iOS does not have an option for this, nor does apple approve apps which alter the status bar. If you want this function you will have to jailbreak your iOS device and install a third party status monitor. As pointed out in another answer, LockInfo does this. SBSettings used to, but no longer does. If you're running an iOS 4.x device, OpenNotifier might be useful as it does this as well as give you pull-down notifications similar to android and iOS 5.
If you're developing for this device, however, you can add this function yourself. As a developer you can run custom code without jailbreaking the device - you just can't submit that code to the app store.
The trick, then, is going to be finding example code for this feature. I expect someone in the jailbreaking community will have some info on what the code needs to do, and if you're lucky you'll find an open source project for it. Then you can compile and sign it yourself, and as long as you keep your ad-hoc license current and recompile/re-sign it yearly, you can use it on your personal devices.
I think a lot of developers overlook the fact that they can run any code they want on their own devices without jailbreaking. They can also distribute such apps in a limited manner to their friends using adhoc distribution as well.
It looks like OpenNotifier is open source, and has the functionality you need:
https://github.com/n00neimp0rtant/OpenNotifier
I don't know much about the status of the project, but it might be usable for you as a developer to bring this functionality to your devices.
Best Answer
The iPad mute switch is identical to the iPhone's mute switch except it can't control a ringer/vibration choice. Other than that, it's effect in-app will be identical.
Not all apps respect the 'mute' switch. Apps that have no purpose EXCEPT to be listened to (music apps, youtube, etc.) will not be any different in either switched mode.
Frequently, games or other apps with "ambient music" will silence the music and often the sound effects as well when the switch is set to mute.
It is due to this inconsistency that I choose to set the switch to control orientation lock, and just use the volume controls as needed.