You can still use a KB and mouse.
It cracks me up how so many people respond with "I would rather use a keyboard and mouse". It isn't like Apple's going to force you into using only a large version of the iPhone keyboard if they did this TS Mac. You're certainly free to never touch your screen if you so choose.
However, I think of my Aunt, who is new to computers... I have to explain in great detail how to click and hold on an object to drag it to another location with a mouse. There is so much with the computer where she just "doesn't get it", and never will. In her case, if she were able to touch and drag a file or folder from one desktop window to another, it would make perfect sense to her. She would "get it" after the first try. "Dragging" would take on a whole new meaning (or at least a more understandable meaning).
I see it making sense with apps like iPhoto, when you're moving images around in a book layout. Much the same with iWeb, Pages, and especially Keynote... Dragging images out of the photos palette and sliding them around in the layout, for instance.
In my case, I would love to have multi-touch, either as an option or just built-in (assuming it doesn't drive the cost up dramatically). If you don't need it, or don't like it, don't use it. Simple as that. It isn't like CoverFlow will all of the sudden "only" work with touch. They'll keep the mouse and KB involved with it as well.
As for that mock-up laptop image earlier on... I don't think I'd like a flat keyboard like that. A large part of what allows me to type as fast (and somewhat accurate) as I do has to do with the feel of actual physical keys.
Although for a device that's not designed to be a common use computer it could be cool if it were like an earlier mock-up (based on a patent application, I believe) that showed a touch screen on the bottom that could change into different things based on what program is being run (sliders for a music mixing app, for instance).