Brushes ($8), by Steve Sprang/Taptrix, was the first iPad app that I downloaded and the main reason that I purchased my first iPad. I really enjoyed using the iPhone version of this app, so I knew that with the extra screen space and faster processor, the iPad version would be fantastic.
The Brushes interface is easy to get used to: a simple toolbar at the bottom of the screen controls everything. All of the options that you would expect to see are there, including a color wheel, brush menu, undo/redo, and a layer menu. The app offers fast brush stroke performance, and smooth pinch zooming, navigation, and auto save. All of the artwork that you create is stored inside the built-in gallery.
Most impressively, the Brushes app automatically records the process of creating each painting and allows you play back the process later, right inside the app. It even gives you an option to export your actions as a file, which can be converted to a video using the accompanying Mac application, Brushes Viewer.