This is the HTML5 Canvas field module, which allows you to capture manual "drawing" input directly in the browser. It's main component is a FieldAPI Widget for the image field, meaning you can display captured images the same way you would any image field. Some suggested uses are marked-up screenshots and signature capture.
The Drupal 7 version is stable in that it doesn't have any major bugs, but there are several features still in development. It now offers the ability to edit existing images or upload and edit on the fly. The Drupal 6 prototype is being kept for demonstration, but will probably not see any feature backports until the Drupal 7 version has a full release.
If you are interested in getting involved, please post your ideas to the issue queue or join the discussion at http://drupal.org/node/868870.
Developed and maintained by the developers of left-click Advanced.