I understand the resolution would not be very high - but it can
simplify scrolling a lot...
I think it would be too clumbersome. Take a look at the Palm watch[1]
(or any other watch-phone): 2x2 icons (instead of Palm's default 3x4),
a stylus is necessary.
If one would want touch input maybe one like Creative Touch would be
better in later versions? A touch sensitive side scroll with a select
button. No obstructing the screen, no stylus needed, could come in
handy if one could use it for value input (like setting an alarm).
[1] http://www.gizmag.com/go/1641/
--
Michał Gorycki