You can do handwritten notes on the iPad, I've seen it done. A coworker uses iAnnotate and a stylus to make handwritten annotations in pdf files. Looks like it works pretty well.
The thing is that typing works fine for text. But as soon as you want to draw a diagram or a formula or whatever, you're way better off freehand.
I'll have to check this out. My first reaction is that since it isn't part of the operating system like digital ink is with Windows Tablet PC Edition then it's not as flexible or as usable as I'd like. Thanks for letting me know about this app.
The thing is that typing works fine for text. But as soon as you want to draw a diagram or a formula or whatever, you're way better off freehand.