jakeb
Funny enough I'm a High School PE & Health teacher, more of a PE-Geek!
The best solution is Onenote is part of the MS Office Suite. You can also embed music/video into the viewer (you/they could write the music, play it, record it and embed). You can set rulled lines and grids. The lines are not the clear black staff lines, but you could create a templete that has them.
If you are after a free solution I suggest you try foxit, you'll need to pre-create a blank Staff sheet, but the annontations scroll with the page.
I would also try Jarnel the OSS version of onenote, but I haven't used it enough.
Here is my list of Wiimote IWB enhancing software it may help you:
http://www.boonjin.com/smoothboard/index.php?title=Interactive_softwarebenpaddlejones
