An MIT engineer has created a piece of software that allows you to sketch something as you would on paper, and then interact with the design as a mechanical system. (TechEBlog, 12/26/2007)
In a separate video listed under Alternative Sources, MIT Professor Randall Davis demos and narrates the sketching simulation.
A different but similar project, Crayon Physics by Kloonigames, involves sketching in colors on a tablet PC. The link to a video demo of Crayon Physics (with smoothing music) is listed under Alternative Sources.