Handwriting-recognition software was first used with electronic writing pads, but became widely spread only after the first Palm Pilots began to appear in March 1997.
The idea behind it is quite simple, a computer program that translates handwritten letters, numbers, and other symbols into individual computer codes. What it does is take these various symbols and create a pattern for each, then, when the user draws a line the computer attempts to find the most similar pattern to that drawing, outputting the desired symbol.
Handwriting-recognition software allowed PDAs to replace notebooks and Post-it notes, and from what I heard, once one is comfortable with all the patterns he can input information quicker than most people can write it.
The input device is usually a pen-like object commonly known as Stylus. And when it comes to PDAs, there's also the popular Onscreen keyboard which seems useless to the people who master the Stylus.