Install the addon and open a new document to start prototyping. It supports common shapes like Text, rich text, Images, Rectangles etc and Annotation shapes like arrows, bullets, GTK widgets and Windows XP widgets. Using Pencil is easy just drag and drop the shapes or widgets you want to add to the application and customize them with text and colors etc. The finished prototypes can be exported to PNG images.
Since it is Firefox 3 extension it works in all environments which supports Firefox 3, if you wish a standalone version you can get it for Linux and Windows Xp / Vista.