Not as good as pen on paper, but the closest I've ever seen. You should probably go to a store and play with one to see if it suits you. I bought my Surface after I did that.
If you don't need handwriting recognition (I don't personally, but it is nice to have), I've found that Stylus Labs Write to be better than the App Store's version of OneNote (http://www.styluslabs.com/). It seems to have a little less lag than OneNote for note taking also. FWIW, Write is cross platform, and I imagine it would work great on something like a Galaxy Note.
The full version of OneNote, however, is worth the cost of admission. Works fantastic with the Stylus and is way better than the Win8 App store version.
I've used a Cintiq for years, and it has the exact same issue with tracking the pen near the edges. If anything, it's worse than the Surface. So it never occurred to me that there might be a solution. Thank you for the link!
When you calibrate, you also need to make sure you hold the pen vertically. Even after the more detailed calibration, you'll get a few minor issues, but it's way better than the 8 point calibration.
Landscape vs Portrait will also cause issues, because the angle of the pen is different, and causes tracking issues. It's imperfect, but I still love how good the pen is on the Surface compared to all the tablets that don't have a Wacom digitizer.
The one gotcha, especially if you go for a heavily discounted Surface Pro 1, is battery life when compared to the likes of an iPad. If you can deal with that, the Surface Pros are fantastic devices.
I figured that might be the case. If I got one I'd go with the Surface Pro 2, more than likely.
I also plan on keeping the iPad around. lstamour mentioned this in another post, but weight-wise, I'm assuming I'll still prefer it for reading pdf's and such. That's actually the main reason I got an iPad to begin with. I wanted to be able to read tech books, pdf's, papers, etc on something electronic and iPad beat everything else I tried.