Personally, I hate using onenote with a pen. It tends to shift your strokes around at will, which wrecks havoc on diagrams/math. I've never used it with the keyboard, since I have a TC1000 and almost always have the keyboard detached.
The writing is smooth, but suffers greatly from the above mentioned problem. If you're only going to be doing handwriting, you may be ok. I've found that the included Journal software works much better handling handwriting (faster single stroke undos, easy to select and move sections of drawings or text as onenote tends to group items together incorrectly and is just generally faster), though it doesn't have the orgizational features of Onenote.
Do you have Onenote installed on a computer? If you do, I can send you a file from it as the export feature isn't that great.