Tablet Toolbar for ArcGIS 9.2
Using the Tablet toolbar for digitizing is great for use with a tablet PC, but it's also fine with a desktop PC. Get the tool by going to View -> Toolbars -> Tablet
Using the Tablet tools Ink Settings button (circled in green above) you'll get the window shown below.
Make sure you check every box that you can check (especially "Render Ink Graphics as lines when projecting on-the-fly in ArcMap). Also, move the delay time to mid-way on the scale bar like it shows in the screenshot above.
If you are not familiar with how to digitize using a tablet PC or how to use the Tablet toolbar in general, please see a short tutorial I wrote up for a ArcGIS 9.1. If you scroll to page 7 or look for the text "Using the Tablet Pen as a Digitizer," there's a description to help you get started.