A few things immediately struck me about the device - firstly, that it would be great in a legal interview setting; secondly, that it might be handy if you could replace the pen's audio track with a higher quality recording after the fact (the talk last night was 'officially' recorded for podcast release somewhen soon, for example); thirdly, that it would be really handy if you could 'record' your own interface drawings and associate them with arbitrary bits of code.
So for example, in the video above, starting around 2minutes 0 seconds in, there is a piano demo where the user can draw a small piano keyboard, and then play it with the pen.
(Note - if you don't already know this trick, you can deeplink into Youtube movies by adding things like #t=2m0s onto the end of the video id - so e.g. http://www.youtube.com/watch?v=OU_RKv5zemM#t=2m0s)
All when and good, and I didn't really get any further than the idea that it would be good if you could draw/record your own interfaces, though I had no real idea what form that might take.
But as I was dropping off to sleep, I started wondering what sort of paper based note taking interface might be useful for working alongside a book or print journal article. For example, what sorts of mechanism might devices like the Livescribe offer in terms of pulling in additional context around a book that a readr was taking notes on (as in LibraryDNS, cf. RadioDNS: Books that Can Phone Home).
The first thing that came to mind was that it might be hand to make a reference to a book (e.g. by ISBN, or in the case of a journal article, a DOI) and then by page.
Here's one way I thought it could look like:

Using the pen display, it could then display a shortcode to the book reference (e.g. pointing to a page like http://my.safaribooksonline.com/032157947x), or if an audio version of the book were available on the pen, it could play from that reference. (The above notation supports multi-page references e.g. pp 76-78, the two dropped p lines specifying a - separated range of pages.)
What this in turn requires are book websites that have full text copies of books available on them to use URIs that can be readily constructed around an ISBN and a page number.
So for example, on Google Books, if you can find a book ID from its ISBN, you can deeplink into a page (if preview or full view is available) directly: http://books.google.com/books?id=x1Q9TxhYA3sC&pg=PT14
I'll try and ponder some more possibilities, and plausible use cases, over the next week or two... And as with my thinking about all mobile library applications, they'll be driven by a mind's-eye view of someone sitting at a desk somewhere, maybe a library, maybe not, maybe with print material (journals and/or books) around them, maybe not, maybe with a pad or notebook, or a laptop or mobile phone, or even a computer pen, just trying to get some information related or related information activity done...
PS in passing, it never ceases to surprise me how many websites that deal with books are not capable of identifying an ISBN and then searching by ISBN when an ISBN is entered into a search box...