I don't have an iPad(yet), but I tried a very basic page you can get at http://beebole.com/brol/contentEditable.html
Tap the blue screen and start to type. On an android phone it works ok.
It looks like the UI uses an editable div. I believe that editable divs do not trigger the built in keyboard on an iPhone, and there's no way to force it to do so.
I have played with making an absolutely positioned single-char text input box in my custom editor (https://github.com/dnewcome/richie). The idea is that it forces the built-in keyboard to show but the input is caught and inserted into the DOM. I don't use contenteditable since it doesn't work on most mobile devices. My hacks are really rough but I think the technique could be polished eventually.