The Livescribe Pulse smartpen places a computer inside a writing stylus to deliver a pen and voice recorder that remembers everything it writes and syncs it all with your PC.
There is a tiny scanner in the tip of the pen that picks up invisible dots in the special paper to keep a timeline of where the pen comes into contact with the paper. The pen can have its voice recorder activated, so it records audio while the notes are taken and afterwards, simply by touching the pen to any point in the notes, you can play back what was being said at the time.
If this sounds amazing, it is and it works. A journalist colleague swears by the smartpen now. Livescribe sells notebooks of the special Dot Paper, and users can even print out their own Dot Paper using a 600 dpi or greater printer.
Here's a video to help explain (it's a bit cheesy but it is aimed at students).