Johnny Lee, of CMU, has created a very useful hack of the common Wii remote to effectively replace the need for a smart board. Here is a video showing him demonstrate his technology. The system is based on the fact that the Wii remote is a high quality infrared camera. By connecting the Wii remote to a PC/Mac via Blue Tooth -- rather than to the Wii game console -- the camera can now be used to track infrared sources. Because many people have Wii remotes and Blue Tooth enabled computers, the only thing they need is an infrared source. A number of devices are now being produced. I have a customized key chain light, but a commercially sold version can be had for a few dollars. There are other versions, but I like this one because it does not require the person press on the surface to activate the light. That's important to me because I use LCD TVs to display. Pressing on the surface could cause damage. If you know that you are going to be using a firm surface, such as a white board, you can use a light pen that turns on as it is pressed to the surface. That can be lot better than having to remember to press a button every time you start to write.
The Wii sees where the infrared light is positioned on the surface -- which can be anything flat -- and relays that position back to the computer via Blue Tooth. The combination of the light pen and the Wii emulates a mouse. You can move, write, click, etc. as you could with a normal mouse.
The key to making this work is the software Johnny Lee created and the versions that have subsequently taken his code to the next level. The most sophisticated on the ones I found was Smoothboard. There is a cross-platform version that also works nicely. It's less feature-rich, but could be a good option for schools with Linux and Mac systems.
One thing I learned from my tests is that it's a good idea to use two Wii remotes. The reason is that when I'm writing I can inadvertently block the light of the pen from the Wii. Things are improved when I put the Wii remote to one side of the screen, but two units would certainly help.
The possibilities of this system is great. You could project on a brick wall via a LCD projector or view your computer via a large TV screen. The Wii will work with both.
Give it a try. It's a lot of fun and it could save you a great deal of money.