The below was forwarded from a discussion group, by Lowell Finley on May 14, 2006 -- it is an effort to summarize and simplify Harri Hursti's report (link above) on Diebold DREs. Finley gave permission to use and disseminate this.
Essentially, Harri Hursti found it is easy to install malicious code permanently on the machine at the most fundamental level that can defeat any attempt to secure the machine afterward.
There are three levels of code in any computer:
-- the operating system (that provides essential services, including security, for the system),
-- and the application (in this case voting functionality).
The BIOS is what you are working with when a computer starts up and you get the option to press F2 or some other key and set things like the boot sequence, the system clock, the processor speed, and some hardware level functions, including some security functions.
Hursti showed that it is trivial to alter the Diebold BIOS (the most fundamental level in any computer) and to attack both the operating system and voting application as well. All it takes is to connect the right kind of device, to name the files according to Diebold's naming scheme, and to get brief physical access (a minute or two) to the machine. The system will automatically install the malicious code, which can be permanent, can contain functionality to enable further attacks (such as vote reallocation), can protect itself from forensic investigation, and can defeat any security measures added at a higher level (such as hash code checking).