2. Custom hardware dongle/card with display and keypad for increased security
A custom device with only the bare essentials to connect to the bitcoin network and send transactions would be something awesome. I can't see a better way to protect your wallet while also using it.
We have considered this approach also,in one scenario, you would have:
1.(at home) a secure smart card reader with display and keypad (something like this http://www.smartcardfocus.com/shop/ilp/id~312/ACR83/p/index.shtml)
2. your "main" wallet smart card (this smart card wouldn't be used for small transactions when you are out shopping).
Whenever the bitcoin client wants to send bitcoins, it would send the card request to sign a certain amount of bitcoins, the amount would be shown on the the display, and you would enter your pin to confirm the request. This would secure your transactions from keyloggers and malware as long as the card reader is not compromised. Of course there would need to have a backup of your wallet.dat so that in case you lose your smart card (unlikely for a "main" wallet smart card) you don't lose the coins. This backup would of course be on a media not stored in your network-connected pc (usb in safe is a safe bet
)You can see the more links on http://bitcoincard.wikispot.org/Front_Page (Oh, and a perfect opportunity to ask if someone is willing to administer the wiki?)