According to a patent application made public by the USPTO this morning (and originally filed a year ago), Apple believes it's possible to build a flexible display into an iPad cover in order to "greatly enhance" the functionality of the tablet itself. Taking power and data from a dedicated connector on the side of the slate, at least one segment of the name-deserving Smart Cover could be used to augment the main display with space for extra icons, or operate as a separate media control interface, or simply display notifications. Drawings collected in the gallery below also hint at using the entire inner surface of the cover as a keyboard (ala Microsoft Surface) or as a drawing area. As with all patent applications, there's nothing to say such an idea will ever see Californian sunlight, but it'd be crying shame if it didn't.
Apple Smart Cover display patent application