The Markdown parser included in IPython is MathJax-aware. This means that you can freely mix in mathematical expressions using the MathJax subset of Tex and LaTeX. Some examples from the MathJax site are reproduced below, as well as the Markdown+TeX source.
\begin{equation*}
\left( \sum_{k=1}^n a_k b_k \right)^2 \leq \left( \sum_{k=1}^n a_k^2 \right) \left( \sum_{k=1}^n b_k^2 \right)
\end{equation*}
\begin{equation*}
\mathbf{V}_1 \times \mathbf{V}_2 = \begin{vmatrix}
\mathbf{i} & \mathbf{j} & \mathbf{k} \\
\frac{\partial X}{\partial u} & \frac{\partial Y}{\partial u} & 0 \\
\frac{\partial X}{\partial v} & \frac{\partial Y}{\partial v} & 0
\end{vmatrix}
\end{equation*}
\begin{equation*}
\frac{1}{\Bigl(\sqrt{\phi \sqrt{5}}-\phi\Bigr) e^{\frac25 \pi}} =
1+\frac{e^{-2\pi}} {1+\frac{e^{-4\pi}} {1+\frac{e^{-6\pi}}
{1+\frac{e^{-8\pi}} {1+\ldots} } } }
\end{equation*}
\begin{equation*}
1 + \frac{q^2}{(1-q)}+\frac{q^6}{(1-q)(1-q^2)}+\cdots =
\prod_{j=0}^{\infty}\frac{1}{(1-q^{5j+2})(1-q^{5j+3})},
\quad\quad \text{for $|q|<1$}.
\end{equation*}
\begin{align}
\nabla \times \vec{\mathbf{B}} -\, \frac1c\, \frac{\partial\vec{\mathbf{E}}}{\partial t} & = \frac{4\pi}{c}\vec{\mathbf{j}} \\ \nabla \cdot \vec{\mathbf{E}} & = 4 \pi \rho \\
\nabla \times \vec{\mathbf{E}}\, +\, \frac1c\, \frac{\partial\vec{\mathbf{B}}}{\partial t} & = \vec{\mathbf{0}} \\
\nabla \cdot \vec{\mathbf{B}} & = 0
\end{align}
While display equations look good for a page of samples, the ability to mix math and formatted text in a paragraph is also important.
This expression $\sqrt{3x-1}+(1+x)^2$ is an example of a TeX inline equation in a **[Markdown-formatted](http://daringfireball.net/projects/markdown/)** sentence.
This expression $\sqrt{3x-1}+(1+x)^2$ is an example of a TeX inline equation in a Markdown-formatted sentence.
You will notice in other places on the web that $$
are needed explicitly to begin and end MathJax typesetting. This is not required if you will be using TeX environments, but the IPython notebook will accept this syntax on legacy notebooks.
$$
\begin{array}{c}
y_1 \\\
y_2 \mathtt{t}_i \\\
z_{3,4}
\end{array}
$$
$$
\begin{array}{c}
y_1 \cr
y_2 \mathtt{t}_i \cr
y_{3}
\end{array}
$$
$$\begin{eqnarray}
x' &=& &x \sin\phi &+& z \cos\phi \\
z' &=& - &x \cos\phi &+& z \sin\phi \\
\end{eqnarray}$$
$$
x=4
$$