I've had no problems using the pen for inking, drawing, or navigating with the 02. I've read just as many complaints about the 7" screen UMPC's as the 5" 02 being too small, and more complaints about the inking experience with the soft touchscreens.
I'm glad OQO went active digitizer instead of passive, it provides a great inking experience. I also read reviews saying the Sony UX with 4.5" touchscreen is too small for touchscreen navigation, although I still see plenty of benefit with the touchscreen experience even in small screens as long as the inking experience is not compromised.
I did not get the 02 for PDA functionality or lite MID use, I've replaced my personal laptop with the 02 for almost all of my personal & professional work. The small size works great for ultra mobile use, couch computing, or discreet note taking in meetings, while having the flexibility of docking with a DVD-R burner and full size display, keyboard, & mouse.