http://www.pcworld.com/article/203070/deviantart_hops_on_html5_bandwagon_with_muro_drawing_app.html?tk=hp_blg It isn't as full-featured as some of the apps you can buy on the appstore, but it is free. Anyone tried it? I don't have an iPad. You can access it directly here: http://muro.deviantart.com/ crap! I just realized i put this in the wrong section. sorry.
I just tried it on my iPod touch and well, I works. Not comfortably but it does work. It would probably be better with the larger screen size.
Yeah, I don't think it was designed for the smaller screen. There are quite a few apps that work well for the iPod Touch/iPhone though, if you are interested. I recommend ArtStudio.