The stylus uses interchangeable nibs, or tips. Made of conductive material like metal or mylar, the user can extend the nib's length further away from the stlyus' body, or move it closer using various methods including a twist cap. With the nib extended far from the stylus, it can bend while you use it, which would mimic the feel of using a paint brush.
Besides a nib or tip, strands can also come out of a single hole in the stylus. The patent also showed lights being transmitted through these strands, which could be one quick way to send data to the iPad. In this fashion, the stylus could inform the tablet to change the color of what is being written. The slate might even have a camera that is focused on an LED light on the stylus, and could receive information from the stylus in this manner.
The patent application was filed a couple of years ago and you can view some images from it in the sideshow below.
Apple applies for patent on iPad stylus
source: USPTO via AppleInsider, VentureBeat