I am currently writing from a coffeeshop in San Francisco. I have quite a few days off/vacation days, so I drove up here to visit a college friend. I am also writing from my new iPad!! I really like it so far. There are a few things about it that are not ideal, but I still have my old laptop too. Using the iPad all the time makes me think about the physics of touchscreens, so I will give a very brief explanation here. Circuits and E&M were not my strongest parts of physics, so it really will be brief.
From what I have read, the iPhone and iPad use something called capacitive sensing. In the screen there is a layer of conductive material covered by a layer of insulating material. A voltage is applied to the conductive material, creating a static electric field inside the insulating material. When you touch the screen with your finger, your body's ability to conduct electricity will change this electric field. This is why touching the screen with your fingernail or a stylus doesn't work. They are not conductive and therefore cannot alter the field that has been created in the screen. The iPhone and iPad screens are broken up into a grid that can sense touches at multiple points. The changes in the electric fields can be processed to figure out exactly where you are touching and what motions you are making with your fingers.
Thank you Apple for making such good use of this technology!