Previous to the update, the switch functioned as a screen lock. In the on position, the switch prevented the view from changing from horizontal to vertical orientation automatically when triggered by the iPad’s accelerometer. I kept my screen lock on as the default so this was a shock and disappointment until I figured out how to get my screen to lock again.
Double click on the home button (press it twice). You will get a new menu with a row of app icons. Swipe your figure across this row to the right. The screen lock icon is now on the far left. Here is a useful link that explains this and a few other changes for iPad in iOS 4. And another link, “How to lock iPad orientation…”