The Penny Arcade - Extra Credits series of videos on game design and game culture topics are generally quite excellent. This particular video covers some of the challenges and follies when designing games for a touch screen.
Perhaps the most interesting statement in the video is the idea that having a 'virtual joystick' on a touch device is an example of poor design. I have to say that, in general, I agree. I most often see this type of design in games that try to emulate the traditional platformer style (e.g. 'Mario' style games). This type of game doesn't really lend itself to a touch device since the virtual joystick is much more error-prone than what would be acceptable in a platformer. Typically, the best way to handle a platformer type of game is to create an 'endless runner' type of game where the controls are simplified to a single touch (such as in Rock Runners) or at most two different touch spots (such as in Punch Quest). Perhaps the only good example of a virtual joystick is in Zombiegal Kawaii, and I think that really only works because it is a shooting game (instead of a platformer) where the lack of precise controls isn't quite as apparent.
Folks, watch the video in the source link.