I've used both a Targus and a Logix stylus and they both work great. I've also heard great things about the Pogo styli as well. I take notes like this for my university economics and math classes and its great.
Because the screens on the iPad is capacitive touch, the fine point styli that we're used to seeing from the old Palm Pilots or touchscreen laptops wont work, they need a little bit more surface area to complete the current and respond to the touch. Even though the point is large, lots of the writing apps still write in fine point underneath where you are touching (at the center of the tip of the stylus) and works great. I have used several note taking apps and by far, 'Notes Plus' blows every other one out of the water, due to its accuracy and ability to take larger (more comfortable) writing on the screen and condense it into standard size lines, as well as great text integration as well. It also allows you to adjust where the actual point the lines are drawn based on where you are touching (i.e. a couple pixels up or down from where you are actually touching on the screen so you can see what you are doing). Best $6 app you can buy for note taking. Check it out on the App Store.