If you want to use a stylus with your iPad to take handwritten notes, there are a number of good apps to choose from. After I tried GoodNotes earlier this year at the suggestion of an iPhone J.D. reader, it quickly became my favorite of the bunch for the reasons that I explained two months ago in my review. A recent update to the app adds significant new features that keep the app at the top of my list.
Shapes
First, the app can now recognize shapes. This is a feature that I had first seen (and really liked) in Notes Plus. If you are taking notes and want to drop a circle, box or line — either because you are making a diagram or just because you want to place a box around some text to make it stand out — Notes Plus can automatically convert your drawing into a shape with perfectly straight lines (or, for a circle or orval, perfectly curved lines).
GoodNotes adds the feature but does so in a way that I think makes more sense. Tap the pen tool once to write on the screen, or tap it a second time to toggle the shape recognition mode. Implemented this way, instead of the app trying to guess whether you are trying to make a perfect shape, the app responds to your explicit instruction on what you want the app to do.
Improved zoom window
A zoom window is an essential feature of an iPad notetaking app to fit a reasonable number of words on a page. GoodNotes now makes it easier to get in and out of that mode by adding a shortcut at the far left of the toolbar to toggle the window on and off.
Also, it is now even easier to resize the zoom window to a size that makes sense for your writing because there is a resize handle in the corner of the window.
Improved eraser
Typically when I use the eraser tool, I want to fix one small mistake and then get back to writing. Previously you would have to tap the eraser tool, then erase then tap the pen tool again to go back to writing. Now, GoodNotes includings a setting (in the iPad's Settings app) called "Auto-Deselect Eraser." When turned on, you tap the eraser tool to turn on the eraser, erase, and then as soon as you lift up your stylus the app returns to the pen mode (or the highlighter mode if that was the last tool you used). This feature saves you a step and makes you more efficient when using the eraser.
Another update is that the eraser tool now comes in three sizes, and a visual outline on the screen shows you the size of the eraser as you are using it so you can see precisely what will and won't be erased.
Note that the updated version of GoodNotes, version 3.2, is already in the App Store if you purchased the app when you first got it. If you instead downloaded the free version of the app (GoodNotes Free) and then paid for an in-app upgrade to remove the two notebook limit, Apple has not yet approved version 3.2 of the app but the developer expects it to be approved this week. [UPDATE 7/17/12: Version 3.2 of GoodNotes Free is now available in the App Store.]
And fortunately, the developer of GoodNotes (Steven Chan) has even more improvements coming soon. His blog shows off an upcoming variable line width option that allows the pen size to vary as you write. I presume that this feature will be similar to the fantastic fountain pen feature in the Paper app, although it looks like the widths will be not quite as dramatic and thus more realistic for a pen.
I am the first to admit that taking notes on an iPad involves tradeoffs. Even with a good stylus, you cannot write on an iPad as quickly as you can write on real paper with a real pen. If I am trying a case or arguing a motion in court, I stick with pen and paper. On the other hand, when you take notes in GoodNotes, you can quickly undo or erase, change line size, store virtually every note you have ever taken in one space, and easily send notes via email to share them with others. In meetings and other settings, I often find an app like GoodNotes on my iPad to be the best option.
Click here to get GoodNotes ($3.99): [removed]
Click here to get GoodNotes Free (free): [removed]
NOTE: Those old links no longer work; here is an updated link to the GoodNotes app ($7.99): 
