Awesome concept. I was thinking about this yesterday actually (while looking for the pads of paper I like, which are virtually impossible to find!).. I really think for these products to be successful, there needs to be an obsessive level of thought and craft put into how it feels. For one thing, in some of the screenshots you can see a shakiness in the lines... I've found any of the electronic writing surfaces I've used too sensitive, and without enough tactile feedback. There's a certain friction to pressing a pen into paper that makes for confident lines. I'd like to see this sort of product done really, really well... I'd certainly love to abandon my obsession for pen & paper.
They claim that "no antialiasing" is "one of our best features". I guess they like the jaggies.
I could see this as being useful as an input medium to something like Balsamiq, but that might conflict with the "we're keeping it simple. just like paper. nothing you can't do with paper." feel they're going for. Which is an odd pitch --- people selling electronic whiteboards usually say something like, "you can pretend it's like your other whiteboards, but here's all this other stuff you can also do with it!"