Touch the Screen vs Press a Button

Is the touchscreen the end-all of user interfaces for mobile devices? There were rumors in early 2011 that the iPad2 would lose all physical buttons (which did not come true, obviously).  To me, that sounds like a really good and bad idea. Good, in the sense that a device that is all a big screen certainly looks nice. Bad, since it would be much less user-friendly than a device with some real physical buttons to press.

I have been thinking about this subject lately, after using a BlackBerry Torch 9800 as my work phone for a few months.  I like the device a lot, but there are certainly some rough edges and some places where there is a UI conflict between touching the screen and pressing the buttons. At the same time, I am using both an iPod Nano 3G, and a couple of iPod Touches. I used to have SonyEricsson Symbian-based P900, P990i, and G900 smart phones which also were combined touch/press devices with a stylus.

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