Just installed a recent build of Lonestar (Tablet PC v.next) on my old Acer Tablet PC. I'm amazed what they did to the TIP and the recognizer! This really improves usability a lot. Also, the new Context Tagging Tool which allows you to attach context information (known as factoids in SDK v. 1.*) to arbitrary input fields in arbitrary applications, is a very cool thing as it improves recognition considerably.

Haven't looked too deeply into the new SDK (1.7) yet, but the biggest improvements seem to be (a) the fact that the ink controls now work in partially trusted environments (so you can put them on HTML pages or use them in no-touch deployment scenarios), and (b) a thing called real-time stylus which gives you more low-level control of the ink as it is generated. Will have to dig deeper into this in the next few days...

And the best of all: the upgrade to Lonestar will be free (as in "beer" ;-), so if you're planning to buy a Tablet PC today (I just ordered the new Toshiba M200 which has a great resolution of 1400x1050 - just what I was waiting for), don't hesitate since you can upgrade later.