How do i replace my ipad with a new model in itunes?

I'm replacing an iPad with an iPad 3rd generation and will be gifting the iPad to a friend.
What steps do I need to take in iTunes for this to run smoothly?
I want to end up with:
1) The new iPad working but with all of my data, screen layouts and settings from my old iPad.
2) The old iPad "de-registered" (if that's possible/necessary) and reset to factory default conditions with no data present and working on myfriends iTunes account.
Is 1) as simple as backing up the original iPad in iTunes and plugging the new one in and restoring from the old backup? Possible complication: I get the "This iPad is synced with another computer. Do you want to erase and restore..." message whenerver I plug it in, although it does seem to sync when I cancel the "erase and restore" dialog. Would this complicate things?
Re 2), my friend has an iPhone 4 and uses iTunes already. Is plugging in my "wiped" iPad all he needs to do? How do I reset the original iPad?
I hope that these are simple questions, already encountered by many of you, but myself and my friend are at the stage where we have both only had one apple product and have never had to manage another device in iTunes so we just don't know what to expect and don't want to lose any data!
Thanks in advance for your time and help!

Is it as simple as backing up the original iPad in iTunes and plugging the new one in and restoring from the old backup?
Yes
How do I reset the original iPad?
Settings --> General --> Reset --> erase all content and settings;.

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how to use iTunes to sync is in the
http://www.apple.com/support/itunes
For MacBook Pro community and OS X
MacBook Pro
https://discussions.apple.com/community/notebooks/macbook_pro
https://discussions.apple.com/community/mac_os?view=discussions
http://www.apple.com/support/macbookpro
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http://support.apple.com/kb/HT1386
http://support.apple.com/kb/HT1351
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How do i replace my ipad with a new model in itunes?

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