Microsoft OneNote is a Digital Notebook. Annotating a document is one of the best features for teachers in OneNote as it is such a helpful learning tool when doing Q&A with students or learning a new concept. This might be the best tool I have seen to annotate aside from using a SmartBoard.
OneNote – Your Digital Notebook
Get organized in notebooks you can divide into sections and pages. Revise your notes with type, highlighting, or ink annotations. Draw your thoughts and annotate your notes.
Teachers can use OneNote to organize lesson plans in searchable digital notebooks.