This is a mechanical/computerized dry erase board that works almost exactly like an etch and sketch... although this prototype does not show the Z axis, I have instructions and a working demo to demonstrate how you can make a functional Z axis. (pen up and pen down)
By using a joystick, some controllers, written code, and some elbow grease, you can build yourself a life size, 21st century computerized canvas. This video shows all of the working components.
The difficulty of this project depends on how large you make your board... the bigger... the more difficult. This board is 4x4 feet. It was also built in my dorm room, so precise measurements without a stable table were kind of difficult.
This project was most recently seen at the San Mateo Maker's faire at the Microsoft booth.
*There are a bunch of improvements I am going to suggest that have not yet been implemented onto the board.