7Notes for iPad: A free alternative to Penultimate and Notetaker HD
via lifehacker.com
I've been using it for the last week, and I actually prefer it to Notetaker HD. Most of the features are free, but you can get handwriting recognition for an $8.99 upgrade.
Allegedly it outputs to Evernote and Dropbox, but it's not yet clear to me how it works. Still, highly recommended.