I was always amazed by it. Other PDAs used a special alphabet one had to memorize, but Newton learned and recognized natural handwriting. And while Newton didn't last long, the handwriting recognition did, reincarnated as Inkwell.[1]
Graffiti was so easy to use that you would see people write with it on whiteboards.
I never used a Newton but the Microsoft handwriting recognition was pretty good on the iPAQ. Maybe the Palm graffiti approach is ok for people who don't care about feedback and can edit tiny characters on a tiny device.