It seems that using the forward-facing camera with FaceTime crashes the iPad device. This is what some iPad users are experiencing lately. An employee from Verizon allegedly confirmed that they also experienced FaceTime crashes on some iPad 2 demo units.
It seems that restarting the iPad temporarily solves the problem, but a crash will still happen after sometime.
I guess a software update for the iPad 2 will be coming shortly. ;)
Apple discussions on 'FaceTime camera not working' [web link]