iPad iOS6 built-in Notes app - where are the notes stored?
Notes are stored locally without limit other than storage space on the iOS device. They sync to iCloud and there is a web app for viewing / editing the notes. 

They do count towards your 5 GB of free iCloud storage that you get by virtue of operating an iOS device. Should you need more storage than that, you can pay yearly.

If you don't sync the notes to the cloud, then that limit is not in effect. Whether or not you sync with iCloud, the notes are stored locally on the iPad.