While it does cost $5.99, it can be worthwhile if you take a lot of notes....which is why I think it is so popular with college students.
Similar apps are:
SoundNote for $4.99.
Noteability for $.99
A Note on Evernote. If you have a Evernote account you can also use the Evernote app to record while taking notes, but it saves it as an embedded file. It is not as smooth, or have options to bookmark the audio, but it is still a viable option for note taking and recording. It's free, so give it a try!