Avi Rubin, a computer science professor at Johns Hopkins and author of the book "Brave New Ballot," recently discussed electronic voting machines on NPR's Talk of the Nation. The interview is absolutely fascinating and I strongly recommend listening to it. Interestingly enough, Rubin prefers paper ballots marked by a computer and scanned by an optical scanner.
In this scheme the voter would cast his vote using a touchscreen computer (like the AutoMark VAT), but all the computer does is print out the marked paper ballot. The voter can then verify the printed ballot and perhaps even request an additional copy to keep. The filled out paper ballot is then counted and captured by an optical scanner. This way recounts and audits can always go back to the paper ballot and be preformed by hand if necessary.
From a voter standpoint, carrying a piece of paper between two sophisticated machines might seem strange but it actually is the most secure and verifiable method.
Also in the interview, Dr. Rubin describes the source code for voting terminals developed by Diebold (the leading manufacturer of electronic voting machines), as "full of security problems, flaws and bugs"; furthermore there's "no way to verify the votes, no way to preform an audit". Very scary.