This is a great article about how iPads can be used with the writing process. It highlights best practices that teachers can follow in order to best leverage the technology, and suggests apps to support the process.
Scribble Press (FREE) is a book creation platform that allows students to both write and illustrate their own stories. Final products can be downloaded to iBooks or ordered as a hard copy.
This app has been featured in the Apple iPad commercials for teaching young students to write their letters. Beyond the ability to trace, the app also records letter sounds, names, and phonograms.