Good Gear Guide
In Pictures: The must-have iPad office apps, round...
Best PDF markup: GoodReader
Although GoodReader didn't start as a PDF annotation tool, it's evolved into a darned good one. You get the key markup and editing tools you expect from Acrobat Professional. The app does a good job of using touch gestures for highlighting portions of your PDF for markup. My only quibbles are that getting the markup menu back can be tricky, and you can't rotate individual pages, so sometimes you're marking up a page rotated 90 degrees from the orientation of the sticky notes' text you're adding.
Note: The free Adobe Reader is good for simpler uses, and the $9.99 PDF Expert has a slightly cleaner interface.
Compatibility: iPad (iPhone version: $4.99)
In Pictures: The must-have iPad office apps, round 7