Skitch is great because it is compatible with Evernote so the work can be saved a student's notebook (eportfolio). This is helpful when iPads are shared with other classes. You don't need to worry if another student deletes or changes the work. I like Book Creator because not only can you open the book in epub form you can also email the book as a pdf.
Here are some screenshot examples of picture drawn or photos taken and labelled using Skitch.
My students used these in Book Creator to write and record their own book. Below are some screenshots of the pages of one book. You can see the audio symbol where the students recorded their voices. Unfortunately, you can't hear the recordings because these are just screenshots.
Now I need to learn how to insert a pdf into this blog??? Ideass? Suggestions?? Still new to this blogging thing :)