Can an iPad be child locked so they cannot escape from one app?
This is now a feature in iOS 6 by using Accessibility. You can enable this feature by opening Settings > General > Accessibility > Guided Access. Here you can set a Passcode, enable Guided Access, and choose whether to allow the device to sleep or not (in this case you would want that enabled). After that, triple click the home button after opening the app, and configure the remainder of the settings.

One Caveat:
The only way to get out of Guided Access (without entering the passcode after triple clicking the home button) is to reboot the iDevice. This could be a good or bad thing, depending on the scenario. Obviously one could put a passcode on the device itself which would prevent the user from accessing everything else.