The icon is terrible and the market is saturated. Even with those caveats I think Bamboo Paper may have one of the best “ink” engines that I have seen. I actually think the replication of writing with a felt tip pen is done better in Bamboo Paper than it is in my old stand-by Penultimate.
I haven’t tried it with a stylus because I gave me stylus away, but even with your finger it works pretty well — as well as any other drawing/handwriting app. A few testers have noted that it doesn’t get tripped up when you rest your hand on the screen and I found that it still does get tripped up, but not to the degree that most iPad apps do.