Recently I bought this a Wacom Bamboo Pen Tablet. When browsing the various cartography and art forums I keep seeing references to using tablets and the Bamboo line is pretty affordable as these things go ($70 for this model).
The way it works is that the active area is inside the white lines. If I touch the lower left corner the cursor on the monitor jumps to the lower left corner. If I touch the center the cursor jump to the center. The pen has a nib that is pressure sensitive so it can sense how hard it is pressing on the tablet. The effect is that when I am using it draw it is like drawing on a piece of paper.
Note that you quickly learn that you don't have to stare at the tablet. Just holding the pen and looking at the monitor results in a pretty effective illusion that you are drawing on paper.
The following is a crude map drawn up using the tablet. I used a combination of colored pencils and pens.
Where it is weakest on is lettering. But everything else pretty much felt like when I did my hand drawn maps. There is probably a ton I could do to make this a better handdrawn map but I just doing a quick example.
I also used in Monday's Swords & Wizardry game with Fantasy Grounds. I had much better control over unmasking hidden areas and drawing lines. I suspect with this I could use a blank square or hex temple map and just treat like I do my dry erase plexiglass gameboard. I need to read up on Fantasy Ground drawing tools and practice a bit.
Here is the wikipedia article on Wacom which explains their line of tablet. I have the Bamboo Pen.
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