Are you mainly interested in equation editing and drawing capabilities for the teacher or for students? I think it makes a big difference.
As Manish pointed out, Moodle supports the Algebra and LaTeX markup languages through its filter mechanism. Markup languages are OK for teachers, but students should be using a WYSIWYG editor. The status of the Moodle WYSIWYG equation editor is uncertain, to say the least. It certainly will not be available any time soon. The best current alternative in my opinion is the free program TeXaide. Students write their math in a WYSIWYG fashion; then ctrl-C puts LaTeX on the clipboard, which they can paste into a Moodle text area (e.g., in an Essay question on a quiz).
In my opinion, graphs and diagrams are a huge problem for math and science students. They can use many of the same tools their teachers use (e.g., O-O draw or GeoGebra), but if they are in a traditional activity such as online assignment, quiz question, Journal entry, or lesson, they have nowhere to put the graph or diagram because these activities do not support attachments. The best workaround I have found is using the HSU MyFiles block.
Are you subscribed to the Mathematics Tools forum? Topics like this are frequently under discussion there.
Comparisons and advocacy
equations and drawings
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