I went ahead and purchased SoundPaper ($2.99). They have fixed the growing sluggishness as the lecture progressed. SoundPaper also has added copy and paste which was important to me.
I do not need drawing as much as I need all the other features of this application. Because app switching is so fast on the iPad I could always launch a drawing app for additional note taking and then switch back to SoundPaper to pick up where I left off. I also like the fact they use AAC instead of some crappy low bit rate to record. AAC also means the audio files will be smaller then a raw recording of 2MB per minute.
I also like the feature SoundPaper highlights the text that you typed when a particular audio point is reached as the lecture is played back. Being able to jump to any part of the speech by taping on a word in your notes is very desirable for managing playback so you don't have to listen to the whole thing all over again just to refresh a point or add more written notes for detail.