I asked a friend with an iPad to help me out, and we did find the cropping problem discussed in this thread.
The problem is answered here : http://stackoverflow.com/questions/2966803/a-way-to-correct-background-scaling-in-ipads-safari
You can try using the 'quick fix' from the above link (Answer 2 from above link described more thoroughly here http://www.webdesigndev.com/dreamweaver/create-a-full-page-background-image-with-css3)
or add specific CSS and images targeting iPad. (Answer 1 from stackoverflow link above)
In a nutshell iPad expects all background images to be proportional to its resolution 1024 x 768, while your image is 1280 width x 720height. If you crop it to the 'correct' size ratio= (1024/768) = (x/720) which when solved x=(720*1024)/768 ... x = 960px.
So if you crop your image from 1280x720 to 960 width x 720 height (or any image that has the same aspect ratio as 1024x768), then iPad will accept the images without problems.