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If you’re getting the 169.254.x.x. problem, then the iPad is not getting its DHCP address automatically assigned. This is pretty common on MAC/iPad wifi connections. I tend to set all adhoc connections manually for this reason.
If you check the IP of the computer that you’re trying to connect to (MAC) and use that IP address, but changing the last digit (by setting it manually in iPad Wifi settings), it should connect. On a MAC you’ll also want to use 255.255.0.0 for the subnet (this is usually 255.255.255.0 on windows)
So your MAC IP is:
Then your iPad IP should be set manually to:
Also, if needed set a 5 character WEP encrypted password – WPA never really works.
It might be best to use a router with this software, because so little information is being sent, that an adhoc connection is probably not needed.
Hope it helps.