Instead of creating what Apple considered a "case," they've come up with what they're calling a cover, a Smart Cover. The first model they've showed us at the special iPad 2 event was blue, and will work as a sort of flap system that can fold back and also act as a stand for the device.
You can not only cover the front of your pad when your moving it from place to place, you can stand it up horizontally and vertically. When you fold the Smart Cover back, the iPad 2 is automatically awakened, this entire process working with the smooth use of magnets. When you fold the flaps back down, the iPad 2 falls back asleep.
This new Smart Cover comes in polyurethane or leather, has micro-fiber lining to clean the screen, adds what Apple says is minimal weight and thickness, and has an auto-align feature that works when the magnets grasp your device. The poly case will run you $39 while the leather case will cost you $69. Out of the gate there will be 5 colors for either model, 10 in total.