You need to make a template that's 8.5x11". Do page setup and choose that page size, then Format > Templates and save that as a new template. Whenever you make a new section (tab) go to Format > Templates and at the bottom select that template to be the default for that section. Then every new page in that section will be a nice 8.5x11" sheet.

I teach chemistry at a small college and have been using the combination of prepared notes in OneNote and the tablet to write on them in class. I use Camtasia to record the lectures and post PDFs of the completed files as well as audio podcasts and screencast videos onto the web for the students. I have a simple Toshiba Portege tablet which serves its purpose very well, although it is taxed by compressing the video. Toshiba still sells a convertible Portege laptop/tablet like what I use for $1200 - I'm sure you could find a used one on ebay for much less.

I would recommend a tablet highly over a dedicated in-classroom solution because it has the flexibility of moving from classroom-to-classroom, as well as recording some dedicated online-only lectures at home (like I was just doing tonight).

Check out http://webs.anokaramsey.edu/aspaas/2061/ for the stuff I've been doing. This is for a hybrid (half-online) organic chemistry course that only meets one day a week for lecture and lab. A course like this probably wouldn't be possible without the tablet handwriting and screencasting tech.