Cheap-ass Virtual Whiteboard

So I figured I'd start this off with a project that I've actually tried.
This post comes to you from the brilliant mind of Mr. Johnny Chung Lee, creator of the $14 "Poor Man's Steadycam".
Anywhoo, what we're trying to do here is mimic a $1000+ SMARTboard, cheesy music and all.

Take the jump for a video sample of the "real" SMARTboard and slightly more complete instructions.