One option I've found is a free Mac server & iPod/iPad client solution called Zumocast. You run the Zumocast server app on your Mac, and it streams music and video to your iDevice. Crucially, it can also transcode unsupported media formats on the fly and play them over the network on your iDevice. To test it, I pointed it at a ripped DVD TS folder, and it worked (though it had my quad core i5 iMac at 50% CPU for this extreme example). In practice it's a very elegant solution.
Yes, its possible to run iTunes library and sync it with iPad via Wi-Fi. It is not possible to view iOS devices of iTunes by using Wi-Fi connection. If you want to sync photo and video through Wi-Fi network then its easy just with Wi-Fi MediaSync application which is available on iTunes store.