Magic Pen for Mac

From Humongous Elephants and Tigers:

Magic Pen is an application that allows you to draw on top of your screen (with your mouse, not a "real" pen silly!), much like overhead pens allow you to write on top of an overhead. Magic Pen works on a pad system - you start with one pad as soon as you open it up. You can clear your current pad from the menu, or start a new pad from the menu. You can make as many pads as you like and move between them at will. Each pad also support infinite undo and redo. When you're done drawing on the pad, you can switch Magic Pen to inactive mode, allowing your clicks to go through the pad instead of onto the pad, and hence allowing you to continue with your presentation as proper. The next time you activate Magic Pen (through the Dock, for example), you'll be able to draw on your pad again. Your drawing pen can be customized to have different line widths and color. If you've created a work of art and would like to print your pad (just your drawing, not the stuff behind it), you can do that to (landscape looks the best).