There are two basic methods of creating touch screens for tablet devices: resistive screens and capacitive screens. Manufacturers have to choose between the two -- they don't work together.
Resistive systems detect a touch on a screen through pressure. Tablets that require a stylus often use resistive screens. But how does it work?
Resistive systems have a layer of resistive material and another layer of conductive material. Spacers hold the two layers apart. When the tablet is on, an electric current runs through both layers. If you put pressure on the screen, it causes the two layers to come into contact with one another. This changes the electrical field for those two layers.
Imagine you own such a tablet and you've decided you want to activate a game. You use your stylus to tap the game icon on your tablet's screen. The pressure from your touch causes the two layers in the resistive system to touch, changing the electric field. A microchip inside the tablet interprets this change in the field and translates it into coordinates on the screen. The tablet's CPU takes these coordinates and maps them against its operating system. The CPU determines that you have activated the app and launches it for you.
Resistive screens can be susceptible to damage. If you use too much pressure, you may cause the resistive and conductive layers to be in constant contact. This will cause the tablet to misinterpret commands. Resistive screens also tend to have poorer resolution than capacitive screens.
A capacitive system also detects changes in electrical fields but doesn't rely on pressure. A capacitive system includes a layer of material that stores an electrical charge. When you touch a conductive material to this screen, some of that electrical charge transfers over to whatever is touching it. But the material must be conductive or the device won't register a touch. In other words, you can use anything to touch a resistive screen to register a charge but only conductive material will work on a capacitive system.
Capacitive systems tend to be more robust than resistive systems since you don't have to press down as hard to register a touch. They also tend to have a higher resolution than resistive systems.