When I go to it, it just says "Finding another user" the whole time. I can still paint, but there is nobody else. You may want to also put a chat feature on the side. Painting is fun, but people are going to want to talk as well. Also, the actual paint setup is fairly simple when compared to the Microsoft or Google Documents painting applications.
In summary, add a chat box, add paint functions, and find a way to get some web traffic. Great idea overall.
