iBooks preview not working?
Had the same issue with my iMac running Lion and iPad 1. The iPad was visible but greyed out, as was the preview button.

Here's what worked for me: 


Connect iPad to Mac
Open iBooks on iPad
Click on preview in Author
Close iBooks on iPad
Cancel preview and tap on preview again
Open iBooks on iPad again


Not sure why or how, but it worked for me.

Good luck!