In this paper, a pen-type input device is proposed to track trajectories in 3-D space by using accelerometers and gyroscopes. Inertial navigation system (INS) theory, as an autonomous positioning technology widely adopted, is employed to track the users' handwriting motion without external reference sensors or signals.The INS-based positioning system, however, suffers from unbounded error, which grows with time due to the integration process involved. In order to solve this problem, the system error model is built to analyze the influence of error sources. Then efficient error compensation algorithm based on Zerio Velocity Compensation (ZVC) is developed to reduce the effect of identified errors. The experiments show the effectiveness and feasibility of the proposed method.