Paperport Notes is a great digital notetaking tool for the iPad.
Whether you type or hand write notes, this app can help you capture and store information. The newest feature is the addition of Dragon voice recognition (English only). Now, you can speak your notes and draw images.
Just tap Tap & Speak and begin dictating. The app then translates your speech into text. The dictation was done without an additional microphone. The iPad was sitting on my desk while I spoke.
You can highlight, draw and erase like you would expect.
The text in all your notes is also searchable. So you can create multiple notes and still search throughout all of them.
If you need to open PDFs and mark them up, this app can handle that as well.
If you are constantly looking for the better note taking app, for free, you should try this handy app.