So.... My findings are the USB flash drive will work with the camera kit ONLY if you use a external powered hub. You can cut and paste documents back and forth no problem. For me it kinda defeats the purpose, I wish I could find a battery powered hub. For now I will make it work.
What type of documents are they and are you using the computer and the iPad on the same wireless network? There might be an easier way such as wirelessly syncing them with an app like Air Sharing or Quickoffice.
Mostly PDF, txt and proprietary files. Normally I would use Dropbox but there are times when a customer will give me a file on USB and I need to copy it to my iPad. I did find an ultra cheep rechargeable battery pack with a universal connector that will power my slimline USB hub. It will work in a pinch for those few times I need this option, everything will fit in a small compartment in my back pack.
Just an update... I have this working reliably without external battery power. If I plug a USB stick into the camera connector it doesn't work. If I plug the USB hub into the camera connector it works fine without the external power hooked up.
I mounted two USB drives to the hub and it found both of them. I was able to drag files between the two drives no problem.
While this is not an option I will use a lot, it will be nice when I only want to carry my iPad and a customer hands me a flash drive with files to copy.
Buy a portable wi-fi router with file sharing such as MOCREO 5-in-1 Portable WiFi (not personally vouching for this one it just happens to be the one I have and it cost less than the Apple connection cables).
Plug your USB stick into the router
Connect your phone via wi-fi to the router.
Log into the routers built in file managment or use any FTP capable app to connect (GoodReader, ifiles, etc)