The Palm Rejection toggle in ArtRage relies on how your device identifies the size of the touch on its screen. This will generally work if you're using a finger to paint with, but there's a problem when using a stylus.

Fine tip styluses like the Wacom Intuos Creative, or the Adonit Pixelpoint styluses create touches on the screen that are frequently detected by the iPad as being larger than a palm. The result is that palm rejection becomes significantly less reliable when you're using a fine tip stylus. Not only that, but the size of your finger can vary significantly based on factors such as how humid it is, so it's not a precise switch.

That said, I do appear to be able to rest my hand on the iPad while using the Wacom stylus here but we're looking in to stylus support currently so we'll check it out and see what we can see before we submit the 2.0.1 update, Wacom themselves provide a touch rejection option that may also be of use here (you can set it to toggle via one of the buttons on your pen).