Early graphics tablets, known as spark tablets, used a stylus that generated clicks with a spark plug. The clicks were then triangulated by a series of microphones to locate the pen in space. Needless to say this was a complex and expensive system, one that was also rather sensitive to outside noise.
The first practical graphics tablet was the RAND Tablet, also known as the Grafacon (for Graphic Convertor), created in 1964. The RAND Tablet used a series of wires running in the X and Y locations just under the surface of the pad that send out a small megnetic signal with their location encoded in them. The signals are then picked up in the pen and turned into an X and Y location.
The final evolution in the graphics tablet was the pressure-sensitive pad. In these devices the X and Y grids are separated by a thin insulator, and when the pad is pressed the two wires come into contact at the pressure point. This allows current to flow into one X and out of one Y wire (or vice-versa) thereby locating the stylus. These systems tend to be lower resolution, with increases in resolution requiring more wiring which drives up the cost. At some point there is a sweet spot where the magnetic systems become more reasonable, as they can interpolate between wires to provide higher resolution without more wiring.
The first home computer graphics tablets appeared on the Apple II, in the form of the Koala Pad. The Koala was later released for practically all home computers that supported graphics, including the TRS-80 Color Computer, Commodore 64 and Atari 8-bit family. Competitors were many, with the best of the bunch generally considered to be Atari's own version. Along with the light pen, the graphics tablet faded from general popularity in small home computer systems later in the 1980s.
However, graphics tablets are still readily available for those who produce graphics with a computer, and a wide range are available, from relatively cheap A6 format pads up to full sized A3 tablets. The company Wacom, for example, has a broad range of tablets to suit most needs. Nowadays most use the standard USB interface. The main advantage of a graphics tablet is that it is a far more natural way to create graphical marks within a software package compared to devices such as the mouse. In addition most types are pressure sensitive - the software is able to respond to how hard the user presses the pen to the tablet - for example by varying the width or density of a drawn line on the screen. This creates far more natural looking freehand graphics. Most professional image software (e.g. Photoshop, Painter) is able to make use of the pressure information generated by a tablet. Tablets are also popular for technical drawings, as one can put a paper on them without interfering with their function.
The most common kinds project a weak magnetic field about an inch from their surface, in which they can detect a special pointing device, normally a stylus or puck.
In high-end professional systems, the graphics tablet has always been the input device of choice, for example in the dedicated Crosfield imaging system, many PCB drafting/layout systems, and the Quantel paintbox. They have also been used to control other types of system, such as the Fairlight CMI computer musical instrument.
Touch screens are operated in similar ways, but they usually use either optical grids or a pressure sensitive film instead. Therefore they do not need a special stylus.