Your notes will form the basis of your essay, but this doesn't mean that they can be simply copied, or even "written up" into the essay's text. Notes are an essentially writer-orientated form of writing that need careful preparation through argument, or motivation, before they can be used in the reader-orientated mode of writing that is one of the expectations of an academic essay.
Notes are only really an aid to your memory, so you will probably find different levels of detail useful at different stages in the research process, but you should always take notes on anything you read in connection with a module. It is particularly important to make sure that all the details needed for referencing the information or quotations are contained in your notes, including the page-numbers where the material is located - for this reasons, it is a good idea to use paper with a ruled margin, where the page-numbers can be written. You will find your notes much clearer if you leave a blank line between each separate item, and this means it will probably be easiest to use A4 paper which can be kept together in a ring binder. The advantage of using loose-leaf paper is that it can be shuffled about within the folder, allowing you to add to your notes at any stage.
You will probably have ideas for your essay while you are reading, which you need to write down before you forget them. If you write these down as part of your notes(rather than using a separate notebook for this), you need to make sure that you can tell your own words apart from any quotes you may have copied out, or argument summaries you have made, perhaps by putting them within square brackets, or using a special colour of highlighter pen so that they stand out. Copying out quotes into an essay (or transferring them using cut and paste on a computer) without any indication of your source through referencing will be regarded as plagiarism by your tutor, and your marks will suffer accordingly.