I do the first couple drafts of a piece and all the story notes long hand - it's much easier for me to do brain -> pencil than brain -> keyboard. I type things up in GoogleDocs (I use multiple computers so this is easiest) for the thirdish draft so I can 1) piece it together (I rarely write linearly to start), 2) switch to editor mode to review as I type and 3) send it out to betas.

Large scale revisions are written out by hand, with the file open for reference, before being typed.

I use medium unlined Piccadilly notebooks because they're cheap (the website says $10 but I usually find 'em for $5 at Borders) and sturdy.

I am intrigued by the stickynote + wall system.