Another article on this topic

http://news.bbc.co.uk/2/hi/technology/4360793.stm

Eventually the TPM will be built into the main processor itself, and if the trusted computing group has its way then you will find one in every piece of hardware you own, from mobile phones to TV set top boxes to children's toys.

But for the moment it is a separate piece of hardware, providing enhanced security features to programs that know how to use them.
Hardware security is less common, even if it is a lot safer.

This is partly because it is more expensive to give someone a smartcard than a password, but also because its more work for users, systems administrators and managers.

As a result we settle for second best.