PhatPad for iPad takes hand-written notes, scrawls and converts to type, shapes

PhatPad for iPad on the iTunes App Store

PhatPad offers everything you need to express your ideas, enabling you to draw pictures, jot notes, or put a mixture of drawings, images, handwritten and typed text on a virtual scratch pad. The included handwriting recognition engine automatically converts your handwritten notes into digital text, and PhatPad even takes objects you scribble and translates them to perfectly formed shapes.

I loved my Newton for these very features. Can't believe Apple didn't include them in the iPad. Jury is still out on how well it works.