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Use iVisualiser to create a live video feed of your document or image. Annotate freely around screen with a variety of colours and line thicknesses. You can record a video of the screen as you annotate and can even record a live commentary at the same time - this will automatically save to camera roll for playback and/or review at a later point.
iVisualiser is the perfect presentation tool for both education and industry alike. Carefully designed to be incredibly simple to use, iVisualiser is a powerful app for collaboration, still-image and live video annotation and review.
Not free but looks awesome!