Device Prototype

it interferes with uploading sketches to the Arduino

what are sketches? From the documentaion it sounds like an image you upload to the memory to reduce boot time, am I right?

If it's connected to other pins, using software serial means, the speed may not be fast enough to capture the data, and not all the software serial options implement the Serial.available function.

the baud rate for the RFID reader can vary between 9600 to 115200. I'm okay with 9600, because I'll be making a read every few seconds or so.

Touch screens and lcd can use up a bunch of the Arduino I/O pins, leaving few free for other purposes.

good point. I'm looking for a lcd/touch screen with it's own processor, so I can drive it with few pins. This looks interesting:
http://www.coolcomponents.co.uk/catalog/product_info.php?cPath=50&products_id=187
It only uses two pins!

Why would you want to shut off the RFID reader?

By shut off I meant going to sleep/idle mode to save power. When certain tags are read, I wont need to do reading for a while...

There is no threading model on the Arduino. ...Use of interrupts makes it possible to not continually ask a sensor or device if it has information of interest. It will butt in when it does.

You hit the nail. Threading was exactly what was on my mind. I want to make the UI responsive even if the processor is waiting for some data. I will look into the interrupts.

Thank you so much!