Paper for iPad now has pinch-to-zoom support.
As usual with Paper, it’s a bit different than normal pinch-to-zoom. Rather than zoom the entire canvas, pinching places a loupe-like circle around the area you’re zooming on so you can make your changes while still retaining the entire canvas’s context. Smart.
One slightly related note, though: I still can’t get Paper’s two-finger undo gesture to work reliably for me. Gestures can make applications much better, but they can also make it maddening.