Sorry - got busy for a few days. This is just what I do, other people may have different opinions:
I do almost all of my studying on my iPad using the Tintinalli and Rosen's PDFs. I store them in a Dropbox folder and then use annotation software on my iPad to annotate. IAnnotate PDF has acceptable annotating capabilities and interface with good Dropbox syncing and file management. PDF Expert has a prettier interface and very nice, simple annotating capabilities but lacks somewhat in the file management and syncing areas. I split the books into separate PDFs for each chapter so there are a lot of PDFs, which makes the file management aspect important to me and I find myself using iAnnotate PDF more often.
For the actual annotating I often use a stylus. IPad requires a "capacitative" stylus which is essentially a foam half-sphere on a stick. It's a little more graceful than a finger, but not much - so when I forget the stylus I'm not too frustrated. I solved that problem by buying a 10pack of styli (?) for $4 on amazon.
I mostly hi-lite and underline, although I occasionally handwrite notes in the margin. Basically, I treat it just like I would a hard copy or journal (this is how I consume my literature as well). It's to perfect for handwriting, but I personally find that it is more the act of hi-liting or writing that helps my brain than the actual things I write. That's also the reason I never type, also because it is a pain to type on the iPad.
I keep it I'm the Dropbox and sync my annotations back to it every few days so that I have my materials at work on the workroom computers without having to bust out the iPad. It took me a little while to commit to and arrange this method but I'm pretty happy with it now.
I also have emcrit (audio and video), EM rap, Breaking Bad season 4, Weezer, Van Morrison, FaceTime/Skype, 2do, Amion and many many more useful things. My dad gave me the iPad as a gift, and I used it twice in the first 2 mos because I didn't know where it would fit between my smartphone and laptop. Now I'm a fan.
Apple isn't paying me commission yet, but it sounds like they should, right?