From HowStuffWorks.Com: There are three basic systems that are used - Resistive The resistive system consists of a normal glass panel that is covered with a conductive and a resistive metallic layer. These two layers are held apart by spacers, and a scratch-resistant layer is placed on top of the whole setup. An electrical current runs through the two layers while the monitor is operational. When a user touches the screen, the two layers make contact in that exact spot. The change in the electrical field is noted and the coordinates of the point of contact are calculated by the computer. Once the coordinates are known, a special driver translates the touch into something that the operating system can understand, much as a computer mouse driver translates a mouse's movements into a click or a drag. Capacitive In the capacitive system, a layer that stores electrical charge is placed on the glass panel of the monitor. When a user touches the monitor with his or her finger, some of the charge is transferred to the user, so the charge on the capacitive layer decreases. This decrease is measured in circuits located at each corner of the monitor. The computer calculates, from the relative differences in charge at each corner, exactly where the touch event took place and then relays that information to the touchscreen driver software. One advantage that the capacitive system has over the resistive system is that it transmits almost 90 percent of the light from the monitor, whereas the resistive system only transmits about 75 percent. This gives the capacitive system a much clearer picture than the resistive system. Surface acoustic wave On the monitor of a surface acoustic wave system, two transducers (one receiving and one sending) are placed along the x and y axes of the monitor's glass plate. Also placed on the glass are reflectors -- they reflect an electrical signal sent from one transducer to the other. The receiving transducer is able to tell if the wave has been disturbed by a touch event at any instant, and can locate it accordingly. The wave setup has no metallic layers on the screen, allowing for 100-percent light throughput and perfect image clarity. This makes the surface acoustic wave system best for displaying detailed graphics (both other systems have significant degradation in clarity). Another area in which the systems differ is in which stimuli will register as a touch event. A resistive system registers a touch as long as the two layers make contact, which means that it doesn't matter if you touch it with your finger or a rubber ball. A capacitive system, on the other hand, must have a conductive input, usually your finger, in order to register a touch. The surface acoustic wave system works much like the resistive system, allowing a touch with almost any object -- except hard and small objects like a pen tip. As far as price, the resistive system is the cheapest; its clarity is the lowest of the three, and its layers can be damaged by sharp objects. The surface acoustic wave setup is usually the most expensive.

The screen is installed with sensors all over, those sensors are pretty small they could be hardly seen in some cases.. this is a link that will explain to you how touch screns work and more precicly how I-pod touch screens work, http://electronics.howstuffworks.com/ipod-touch2.htm enjoy :D

A basic touchscreen has three main components: a touch sensor, a controller, and a software driver. The touchscreen is an input device, so it needs to be combined with a display and a PC or other device to make a complete touch input system. Our website http://www.HomeTouchSystems.com will explain the difference between all types of touch screen and USB and 232 controllers. This is a link to our USB controller page http://www.hometouchsystems.com/TouchScreen/touch-screen-controllers.asp This is my best description of a resistive touch screen: The 4-Wire resistive touch screen is the preferred solution for low cost applications. It consists of a conductive bottom layer (ITO Glass or Film) and a conductive top layer (ITO Film). The two layers are suspended by many very small spacer dots. When a certain point is touched, the top layer contacts the bottom layer and a voltage charged by the controller is applied to the bottom layer's electrodes. The coordinate X axis of the touch point can be detected by measuring the voltage value thru the top ITO layer and the coordinate Y axis of the touch point can be detected in the same way by changing voltage input to the top layer's electrodes. All of the above and more can be found at our web site http://www.HomeTouchSystems.com Below are some of our other touch screen pages: ----------------------------------------------------- 15 INCH TOUCH SCREENS: http://www.hometouchsystems.com/TouchScreen/15-inch-touch-screens.asp 17 INCH TOUCH SCREENS: http://www.hometouchsystems.com/TouchScreen/17-inch-touch-screens.asp 19 INCH TOUCH SCREENS: http://www.hometouchsystems.com/TouchScreen/19-inch-touch-screens.asp 19 INCH WIDE SCREEN TOUCH SCREENS: http://www.hometouchsystems.com/TouchScreen/19-inch-wide-screen-touch-screens.asp