Yes, and the pen input works just as it does on a Windows CE device or other pen-based Windows device. However, ArcPad is not an ink-enabled application.
There is one issue to be aware of in this OS. ArcPad has some menus that are accessed via a press and hold action with the mouse or pen. By default, on Tablet PCs, the press and hold pen action is mapped to a right-click action. You will need to disable 'press and hold for right-click' to access ArcPad tap-and-hold menus. For more information about using the pen, click on the link to the Microsoft Web page in the Related Information section; search for Microsoft Windows XP Tablet PC Edition How-to Articles about right-clicking with a pen.