This is an important discussion  

The threats are real, and we need to defend against them.

We need to consider the _whole_ problem, top to bottom.  The
layers that could be subverted include, at a minimum:
 -- The cpu chip itself (which set off the current flurry of
  interest).
 -- The boot rom.
 -- The BIOS code that lives on practically every card plugged
  into the PCI bus.
 -- Board-level stuff like memory controllers and I/O bridges.
 -- The operating system.
 -- Compilers, as Uncle Ken pointed out.
  http://www.ece.cmu.edu/~ganger/712.fall02/papers/p761-thompson.pdf
 -- Your "secure" application.
 -- Users.

As a particular example where PCs that we might wish to be secure 
are known to be under attack, consider electronic voting machines.  
In most cases there's a PC in there, running Windows CE.  Some
application software was provided by people with felony fraud
convictions.  Means, motive, and opportunity are all present.
There is ample evidence that "problems" have occurred.  These
are not confined to the Florida fiasco in 2000.  An example from 
2004 is the voting machine in Franklin County, Ohio that recorded 
4,258 votes for Bush when only 638 voters showed up.
  http://www.truthout.org/Conyersreport.pdf

This should not be an occasion for idly wringing our hands, nor 
sticking our head in the sand, nor looking under the lamp-post 
where the looking is easy.  We need to look at all of this stuff.  
And we can.  We are not defenseless.

As in all security, we need not aim for absolute security.  An 
often-useful approach is to do things that raise the cost to 
the attacker out of proportion to the cost to the defender.

For software, for firmware, and to some extent even for silicon
masks, SCM (source code management) systems, if used wisely, can
help a lot.  Consider for example a policy every delta to the 
software to be submitted by one person and tested by another
before being committed to the main branch of the project.  Both
the submitter and the tester would digitally sign the delta.  
This creates a long-tailed liability for anybody who tries to
sneak in a trojan  This is AFAIK the simplest defense against
high-grade attacks such as Ken's, which leave no long-term trace
in the source code (because the trojan is self-replicating).  
The point is that there is a long-term trace in the SCM logs.
We can make the logs effectively permanent and immutable.

Of course we should insist on an open-source boot ROM code:
  http://www.coreboot.org/Welcome_to_coreboot
The boot ROM should check the pgp signature of each PCI card's
BIOS code before letting it get control.  And then it should
check the pgp signature of the operating system before booting 
it.  I don't know of any machine that actually does this, but
it all seems perfectly doable.

Another line of defense involves closing the loop.  For example,
one could in principle find Ken's trojan by disassembling the
compiler and looking for code that doesn't seem to "belong".
I have personally disassembled a couple of operating systems
(although this was back when operating systems were smaller
than they are now).

We can similarly close the loop on chips.  As others have pointed
out, silicon has no secrets.  A cost-effective way to check for         
trojans would be to buy more voting machines than necessary, and 
choose /at random/ a few of them to be torn down for testing.
(This has obvious analogies to sampling methods used in many
crypto algorithms.)  For starters, we grind open the CPU chips
and check that they are all the same.  That's much easier than
checking the detailed functionality of each one.  And we check
that the CPUs in the voting machines are the same as CPUs from 
another source, perhaps WAL*MART, on the theory that the attacker
finds it harder to subvert all of WAL*MART than to subvert just
a truckload of voting machines.

Checksumming the boot ROM in the torn-down machine is easy.  I
emphasize that we should *not* rely on asking a running machine
to checksum its own ROMs, because it is just too easy to subvert
the program that calculates the checksum.  To defend against
this, we tear down multiple machines, and give one randomly
selected ROM to the Democratic pollwatchers, one to the Republican 
pollwatchers, et cetera.  This way nobody needs to trusty anybody
else;  each guy is responsible for making sure _his_ checksummer
is OK.

All of this works hand-in-glove with old-fashioned procedural
security and physical security.  As the saying goes, if you
don't have physical security, you don't have security.  But
the converse is true, too:  Placing armed guards around a vault 
full of voting machines doesn't make the machines any less buggy 
than they were when they went into the vault. That's why we need 
a balanced approach that gets all the layers to work together.

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