The notebook feature currently seems to be a half-hearted attempt to provide a section where folks can write stuff to themselves. Its very simple, not well integrated into the rest of the site, and not available on the iPhone. However, leaving all that alone, it's even more simple in that its surprisingly difficult to write good notes; I need to actually write HTML code to make a simple list!
I would like to suggest that the developers incorporate something like TinyMCE, TidyRTE, CKEditor, or any other similar tool. All of these would require minimal work on the part of Toodledo developers, and would result in a much more useful feature for us users. Thanks!
Though this isn't the main point of your message, I'll just point out that Appigo's iPhone app Notebook will sync the Toodledo's notes. So, technically, they are available on the iPhone, just not through Toodledo's own app.
This falls firmly in the "for what it's worth" category.