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IBM Trackpoint http://www.pc.ibm.com/ww/healthycomputing/trkpnt.html Best pointing device ever. You can keep your hand in home position for typing and manipulate the cursor. It doesn't actually move, but is force sensitive and is delicately calibrated to move in an intuitive manner.
With a Trackpoint-equipped keyboard and a Cintiq (or a tablet like the Intuos if you're using a laptop) you can rule the world. (Well, unless you're a gamer.) The only thing a Trackpoint can't do well is draw, and frankly touchpads, mice and trackballs fall short there as well. EDIT -- I'm not certain you can find a keyboard with a Trackpoint that isn't part of a Thinkpad anymore. There used to be a couple of license…
Unicomp sells heavy, clacky-key, IBM Model-M style keyboards with the trackpoint built in
http://pckeyboards.stores.yahoo.net/en104wh.html
Sort of pricey, but really nice whwn you want to hack with your feet up and the keyboard in your lap, and not have to reach for a mouse.