Difference between Americans and Russians
When NASA first started sending up astronauts, they quickly discovered that ballpoint pens would not work in zero gravity.
To combat the problem, NASA scientists spent a decade and $12 billion to develop a pen that writes in zero gravity, upside down, underwater, on almost any surface including glass and at temperatures ranging from below freezing to 300 Celsius.
The Russians used a pencil.
I had one of the Fisher Space Pens but couldn't find a refill for it here. Then it mysteriously disappeared.
Actually I had heard this several years ago on TV and it just didn't quite add up for me so I did a little research. The truth is that the Americans did use pencils at first but like e46M3 said, pencils can break. A broken piece of lead in a zero gravity atmosphere can be very dangerous. Just think about it floating somewhere where it shouldn't be like your eye. Another thing that people don't always consider is the O2 rich atmosphere that the astronauts were in where combustible materials can catch fire rather quickly. Below is a link stating pretty much the same thing.
http://www.truthorfiction.com/rumors/s/spacepen.htm
That's true but doesn't really solve the problem. Pencils break and need sharpening.