Many of you know this already. Restive screens don’t require a conductive path to register an object on the screen which means you can use plastic styli, nails and other objects to write on the screen. Capacitive screens require a conductive area, like a finger, in order to register anything on the screen making handwriting, annotations, mark-ups, photo editing, drawing, sketching, digital painting and the like almost impossible. You can’t use capacitive screens with gloves either so come the next ice age, the iPhone sales are going to suffer ;-)
What better way to see what I mean than by watching a video. Here’s a nice, jolly one from Maraderz that demonstrates the effects perfectly.
Of course there are other options. Digitiser screens use a special, active pen and can detect pressure and hovering and eliminate ‘vectoring.’ The LS800 tablet had one and is was cool to use. If you’re interested in this area, also check out multi-touch resistive screens (the Viliv S10 has one) and ‘palm rejection.’ Also remember that resistive layers on can get easily scratched because you can’t cover them with hard glass.
Screens are covered in detail in the Mobile Computing Buyers Guide.