<A target="_blank" href="http://9to5mac.com/2011/10/20/anyone-with-a-smart-cover-can-break-into-your-ipad-2/">It seems that "Smart Cover unlocking" on your iPad 2 works regardless</A> of whose cover is placed on your iPad. Setting a password doesn't prevent this feature from unlocking your iPad to just anyone. This page includes a workaround.