Say I want to create a simple mobile
phone with touch capabilities. What
are obstacles in terms of the laws and
patents that I would run into?
For a specific answer, I worked in the mobile phone world until a little over a year ago, and still have friends working on phones for Motorola, Nokia, and Google. Yes, there are a lot of patent issues you can trip over, both on the hardware and software side. The smartphone players in particular all have large patent portfolios and regularly like to duke it out in court; it usually winds up with some sort of cross-licensing truce that falls apart after a few years and then they're back at it again.
So it's not something you want to just waltz into without being prepared. You really need to have some experienced industry people who know where the problem areas are, and also retain a really good intellectual property law firm.
But as others have said, the bigger problem with consumer electronic hardware is the design and manufacturing. It's very expensive and difficult to come up with a design that will meet customer needs and can also be manufactured with good quality at a reasonable cost. For something of the general complexity of a cell phone, you can figure on something in the dollar range of tens-of-millions to get the first one out the door. That's one of the reasons you'll see many cell phone hardware manufacturers like HTC and Samsung shipping nearly-identical phones with, say, Android and Windows Mobile 7.