Hi.
There are some good note-taking apps out there that do very well.
I don't want to sound like a shill for this, but I want to take a moment to talk up the Note Taker HD app. I use it all the time for taking notes in college.
I like it because you can keep on writing full size at the bottom of the screen while your handwriting gets put into the document at normal size. I've attached a picture ("Document View") so you can see what I am talking about. The gray area at the bottom left is the auto advance area - you can end your writing on the right side and then immediately write on that gray square ... the sentence will continue on. You don't have to worry about re-aligning the device.
Note that I am writing in the bottom box, which is represented by the dotted blue-line box in the top view. You can position that blue box wherever you wish and then write in the bottom. There are also 5 different line thicknesses, 16 ink colors and 4 highlighter colors to choose from.
The second picture is a view of the main screen of the app, which I've set to show both the papers I've got and a preview of a paper (you can view just the paper you've made in either landscape or portrait mode).
In its defense, I have found the iPad to be an excellent note-taking device. I don't waste paper and I have all my notes in one area. Very, very handy and this app, IMHO, is one of the best.
As always, YMMV, but I just want people to see that note-taking apps can be pretty effective ... and useful.
Marilyn