iPad stylus?

So next week the iPad 3 is going to be announced. I have prolonged getting the iPad
because I just didn't feel the need for one. I still don't think I NEED one but since
my birthday is in March I figured I'd treat myself to one. I mostly plan on using it for
a digital sketch book to eliminate all this scrap paper scribbling all over the place.
A friend of mine has a iPad 2 and a clunky stylus for it I tried drawing with it and
it just didn't seem like it was going to be a very useful tool.

Does anyone have a recommended stylus/App that they love?
Do you use an iPad as a sketchbook, why or why not?  
Can anyone give me some feedback about using an iPad as a sketch book?

Any feedback would be appreciated.

Thanks,

Tom Sizzle