Leapfrog, makers of the LeapPad and iQuest, will release a new type of interactive learning toy for kids in Fall 2005. The Fly Pentop Computer uses special "fly" paper for playing games, translating words, and other learning applications. The handwriting recognition will let you draw a calculator on the special paper, and the pen will audibly announce the answers when you perform a function. You could draw a piano and then play the keys. A word can be translated into various languages just by running the pen over it. There is also a journal application.
The Fly Pentop will cost about $99, but applications (Leapfrog calls it "paper software") will be available separately and run from $8 - $30. No word on how much the paper will cost.
Full press release..
The grown-up version: the expensive Logitech io Personal Digital Pen.