Can an iPad 3 connect to a Windows 7 adhoc network with internet connection sharing enabled?

Yes this is definitely possible. I have created an ad hoc network on windows 7 and connected to it with my iPad 3.

1. Go to control panel > Network and Sharing Center
2. Click setup a new connection or network
3. Scroll down and choose Click setup a wireless ad hoc network
4. give a network name and choose WEP encryption from the dropdown list. The password should be 10 characters long and I used all numeric digits for this.
5. tick save this network. and click next at the bottom to create the network.
6. On your iPad or other device select your network which will be broadcast with the name you chose and connect to that network with the password yo uused in step 4.
7. If the device fails to connect, try repeating this process again. It took me a couple times but worked eventually.
8. After Connecting, you must also setup network sharing in order to connect to the internet. You must have an internet connection on either LAN or a different Wireless card or some other device. Go to the Network and Sharing Center again in COntrol Panel.
9. Choose on the left sidebar Change adapter settings to get to Network Connections
10. select the network connection that is connected to the internet (The LAN or alternate wireless / other device) and right click and choose properties.
11. Go to the Sharing tab and check Allow other network users to connect through this computer's internet connection.
12. Select the network connection that you were using to broadcast the ad hoc network for the associated network connection.
13. Click on the Settings button which will bring up a window with a list of services to allow or deny for users using this internet connection via the ad hoc ICS (internet connection sharing)
14. Check at least HTTP and probably HTTPS protocols, SMTP for email, POP3 for email as well if you need, etc... and Click Ok when you're done.
15. Click Ok again on the original window. In some cases you may need to restart the network connection connected to the internet for the changes to take effect.

I hope this helps!

I'm able to connect with my iPod Touch to Windows hosted ad-hoc network under these preferences: Encryption is WEP, key is numerical only (10 digits). Don't have to provide manual addresses.

You just can’t create an ad-hoc network and expect devices to get internet access. You will have to download an app like Virtual Router which will allow you to get internet access on the iPad.

You will also get WPA2 encryption with Virtual Router, as opposed to WEP, which I don’t consider encryption at all.

EDIT: I was just thinking about this again, and now I realise that we are setting up Wi-Fi Direct instead of an ad-hoc network. An ad-hoc network doesn’t support anything but WEP. By the way, Wi-Fi Direct is way better than ad-hoc networking.