Powerpoint is fine for presenting visual enhancements to your lecture, however for the most part it locks you in to material that is prepared beforehand. If you know where to look, you can click Powerpoint's "pen" tool and add some hand-written annotations or even throw in a blank slide on the fly, but you are still limited to staying within your Powerpoint presentation.
The tools listed below are inexpensive or free utilities that allow you to either highlight or write on any part of your screen, at any time. You'll be able to open a web browser, go to a current news site or live image, and circle or underline important details. Or you can call up a word document and annotate it by hand on screen, for the benefit of the students watching.
These aren't perfect - you won't always be able to save your drawings - but they can be very useful in the classroom.
ZoomIt - For Windows, published by Microsoft. Free download. ZoomIt can magnify the portion of the screen that you are pointing at as well as allowing you to draw on the screen.
Desktastic - for Macintosh, $12.95. Desktastic allows free-hand drawing and "stamping" (arrows and such), but you can also save your and print your drawings. This is well-designed software and simple to use.
OmniDazzle - for Macintosh, $14.95. OmniDazzle lets you draw, and also allows you to "zoom in" or focus on areas of your screen using a variety of visual effects (some of them are more fun than useful). This is slightly more complex to use than Desktastic but can be more useful for certain purposes.
Firedoodle - for Mac and Windows, installs as a Firefox plugin. Free download. Firedoodle only works when viewing web pages in the Firefox web browser, however it gives you a variety of annotation tools that can be saved. You can draw freehand, add "post-it" notes, place markers, and focus boxes.
All of these tools work best with a graphics tablet although they can be used just fine with a mouse or trackpad. In addition, you have some built-in tools to zoom the screen (look for the accessibility options in your Windows control panel or Mac system preferences). Finally, when giving a powerpoint presentation, you can move your mouse to the lower-right corner of the screen to access a hidden menu which allows you to choose a "pen" tool for freehand drawing.
