Seems to me like a free version of 37signal's iPad app Draft. Much simplier idea but still awesome.
Why is this "awesome"? I don't have an iPad, so I haven't tried it first hand, but it seems to be a simple drawing tool disguised as chalk instead of a solid line. They're a dime a dozen.
I went back and re-checked it out to ensure that I didn't miss anything. This would certainly have been more noteworthy if it was collaborative in real time amongst multiple iPads (e.g. etherpad).