I recently heard of vyew.com via a local hackerspace but haven't tried it yet.

A dual question: what hardware do you use?

Wacom tablets are expensive but drawing with a mouse sucks.

The little wacom bamboo tablets are actually pretty cheap.

Using a mouse and full size keyboards. Some people may use trackpads on laptops, so any interface designed to be speedy with a mouse would be nice.

I use a pair of vnc sessions so we can both work in our own space without latency, and also see and help with what the other person is doing. The vnc sessions are routed over ssh and via a server (to avoid nat problems). I use this mainly for pair-progamming, but it's also good for drawing / whiteboard stuff I suppose, you can run gimp or whatever in it.