Troy - bugger!
The point of a new library is to support a new "person", or account holder - not device. All devices registered on one person's account use a common library - and AppleID. If I'd caught your post I would yelled "NOOOOOO!!!!!!!!!!!!" before you did it. Dang!
By creating a new library for your iPad of course it will wipe the iPad - it's assuming, quite rightly, that you've probably sold it to someone and they are creating a new account. It was never designed to work any other way. You can't split devices.
Between iOS upgrades (2 to 3, 3 to 4 and 4 to 5) I've noticed that the iPad has taken a few iPhone apps by mistake, but I just deleted them and then all was good until the next major upgrade. This time around (4 to 5) i didn't have any cross-device problems.