Here is a quickly created example of such a use:
http://www.educreations.com/lesson/view/np/522346/?s=AWrK9h&ref=appemail
Three apps I have used are
Educreations iPad app:
http://itunes.apple.com/us/app/educreations-interactive-whiteboard/id478617061?ls=1&mt=8
Explain Everything
http://itunes.apple.com/gb/app/explain-everything/id431493086?mt=8&affId=2101540&ign-mpt=uo%3D4
and Show Me http://itunes.apple.com/gb/app/showme-interactive-whiteboard/id445066279?mt=8&affId=2101540&ign-mpt=uo%3D4