I just saw this today: http://www.unwiredview.com/2007/02/26/sharp-vga-touchscreenfingerprint-reader/#more-372

The screen will be used in cellphones and will add touchscreen and biometric sensor functions to them.

For more details:

http://www.unwiredview.com/2006/12/19/samsung-sch-v960-optical-joystick-phone-how-does-it-work/

Clever image processing algorithms allows to detect not only the placement of the finger but also the angle at which the finger is placed. Thus just by leaning the finger in particular direction you can make the cursor go there. Just like with a joystick or pointing stick.