How does a laptop's touchpad work?

I had been using my laptop for the past four years and its good to have a touchpad other than a mouse as it offers more ease on working and moving files all over the desktop but my question is how does a touch pad works and it remains a mystery to me because as far as I know there are two methods tp give input such as capacitive and a resistive method as we use in mobile phones.Both of them has different principle and what amuses is that touchpad workng.It can be accessed through capacitive touch but even I can move the cursor with many objects.So please explain briefly.
Is there any stylus available so that i can use it as input in paint application and sketchbook pro?