I received the iPad on its first day in 2010 and have been a fan since (and upgraded to the iPad 3 in March). I immediately recognized its potential for instructional use, particularly in the OnLine philosophy courses that I pioneered at SJU. Students typically write two papers a week and send them as email attachments. I quickly realized that, if I could grade them OnLine and return them, it would facilitate the courses and might even help in getting students to read the comments.
Within a few weeks, iAnnotate PDF appeared and, for the price of $9.95 (out of my own pocket of course!), it was exactly what I was looking for. As a result, I was able to write onscreen comments, usually in red, as well as add typed longer comments, and to return the papers immediately. This was satisfying to both students and to instructor.
iAnnotate PDF has improved in various upgrades, and I have occasionally used it to grade and return term papers and exams, also while traveling by plane or rail.
In short, the combination of iPad and iAnnotate PDF has been an excellent tool for OnLine grading.