I have just discovered a really great free app that runs on the iPad turning it into a light pad allowing you to lay your image onto it and your paper on top of that and be able to see the image through your paper for tracing the outline!

The app is available from the Apple Store for free and is called Color SoftBox, although you will need to search for "Soft Box Color" in order to locate it. This app was designed to be used by photographers to allow using your iPad as a light source for taking a photo hence the variety of colours that can be selected.

To use it for our purpose you will need to turn the ipad brightness up to maximum and then inside the app simply select the white light option from the colour list. 

It works really well and gives you a cheap light box for sketching out your painting all beit a bit on the small size but it is workable.