Is it possible to play 1080p MKV files on iPad2 over uPnP?
Personally, I do this with a DLNA intermediary running on a Windows machine. In my case I use ZumoCast. It has a server-side component (I run the Windows-based component on but you could use the Mac one if you have a Mac in your house) and then an iDevice player that connects up to it. The server-side component does transcoding on the fly for you and I've certainly been able to use it with high-resolution files that are in MKV containers without any issues.

At its heart, ZumoCast is a DLNA server and client that just kind of keeps it all within the family. The ZumoCast client will only talk to ZumoCast DLNA servers.

There are app store apps that purport to any DLNA or uPnP server for streaming. I have no experience with them though. Some are free so you can try risk-free at least. For example:


AirPlayer
media:connect for DLNA and UPnP media streaming\
GoodPlayer


Those are just a few that showed up in a quick search.

How well they work? Hard to say. It's going to be very dependent on your device and your network. A 1080p video+audio stream over your WiFi network might push it to the limit. Add transcoding and resolution downsampling (your iPad 2 only has 1024 x 728 pixels so it has to resample 1080p content to fit it on the screen) on the iDevice and you may not get the greatest viewing experience.