How can I make a doodle pad like this for a website? Is flash the only option? I wanted to make one for advert design.
Edit
Basically, I want to provide features like customized text (font/color/size) and placement, option to put any image with scale/rotate/transform option etc so that he can design advert himself.
Edit2
What could be alternative approaches to design this kind of editor?
Edit3
I've also seen options like o3d and webGL but it seems they won't work on most of the browsers.
Flash is not the only option. You can write a Java applet to do this, or use the new HTML 5 Canvas with javascript.
Your question is a bit broad - you need to provide more detail for more specific answers.
The answer to this question depends a lot on your target audience. Flash has a broad installation base (but probably won't ever work on iOS devices). Since it's a plugin, it'll work the same across all browsers that support it, including dinosaurs like IE6. HTML5/Canvas, will work on most modern browsers, including iOS devices, but will fail to function on older browsers, and most versions of IE.
Beyond that, I believe this is a bit of a broad question for S.O. Pick up a book on your language of choice and start coding; when you hit things you can't solve by reading the documentation, ask specific questions.