Yes, you will need ITunes for your IPad if you plan to download apps. At least I think you *need* it - to be honest I haven't tried without! Pretty sure that the first time I plugged my IPad into my PC I was prompted to load ITunes.
ITunes itself is free and you use it to download Apps. Some apps are free, some you have to pay for. There are lots of free apps including a few for quilting.
The Itunes will reside on your PC (or Mac), not on your IPad. You then set up an account and plug in your IPad to synchronize it. It can also synchronize via wireless if you have that set up.
From the IPad to buy apps, there is an icon called Apps (I think - mine is not handy at the moment) that is already installed on your IPad, and that will bring up the IPad version of ITunes. When you purchase (even if they are free) an app it will prompt you for your ITunes account and password.