By now you have probably seen or heard about the iPhone, Apple Inc.’s (no longer Apple Computer) revolutionary mobile device that is scheduled for sale in the spring. There are so many bright ideas packed into this thing–the wide-screen iPod, all the neat phone features, laptop like web browsing–but what pulls it all together, and in my mind makes everything else possible, is the touch screen. The iPhone is the first commercial product that comes close to using the vast potential that touch screen technology represents, and it is therefore a model for the future of the Graphical User Interface.
Touch screens are advantageous to other input devices for one fundamental reason: It feels natural to manipulate something by touching it. Other input devices, like the mouse or the keypad force us to overrule our natural instincts by making a mental leap: manipulating this thing over here will have an effect on something else over there. We have adjusted to this over time and repetitive use, but the unnatural separation between cause and effect limits our speed, effectiveness and creativity.
Today’s commercially available touch screens don’t offer much of an alternative to other input models because they are binary–either a touch is registered or it isn’t–and therefore act only as buttons.
But touch screens don’t necessarily have to be binary. They can react to pressure, speed, angle, direction, rotation and many other input types, thus creating a User Interface with a more natural feel.
Devices like the iPhone–with it’s enhanced touch screen capabilities–will bridge the gap between cause and effect, allowing use to interact with digital User Interfaces like we do with objects in the real world. Users will be able to complete tasks much faster, with fewer mistakes or frustration. Finding information will be easier, more natural, and fluid. Creative work will be less restricted by concentration on hand gestures, freeing up mental power for solving problems. Communicating will behave more like it does in the real world, effortlessly among multiple people.
As touch screen technology advances, digital interfaces will learn to behave like their analog counterparts, diminishing the barriers to digital device usage. Eventually, the difference between analog and digital will vanish altogether from the users perspective.

Right on!
I wrote a piece a while ago that is along the same lines and talks about the decreased ‘cognitive friction’ in light of the iPhone UI.
http://www.alhome.net/index.php/2007/01/14/two-words-for-apple-thank-you/