Contrary to what you may have read they do not work by pressure. They work by using a principle called coupling capacitance. The touchwheel and buttons contain two layers of electrodes. The top layer is composed of vertical electrode strips, and the bottom has horizontal strips. These two layers form the coupling. An integrated circuit underneath them measures the capacitance from each of the horizontal electrodes to each of the vertical ones.
http://www.ipodlounge.com/faqs_more.php?id=1410_0_10_0_C
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