In the Federal Circuit opinion below, they held that a method patent must be tied to a particular "machine" or involve a "transformation" of some physical article. The "transformation" prong of that test left some interesting loopholes open for software patents, because they held that transforming REPRESENTATIONS of physical articles is good enough. When going through old cases, the court noted that a patent for x-ray medical software was okay because the data represented physical objects (i.e. human bones). However, patents for financial systems weren't patentable because dollars and cents aren't tangible articles.
However, the most interesting parts of the Federal Circuit's decision was that they almost completely declined to discuss the "machine" prong of the test at that time. It will be interesting to see what (if anything) the SCOTUS does with this. Specifically, the Federal Circuit said that a patent must be tied to a "particular" machine (so that the method could still be practiced on machines other than the one described). However, we don't really know much about what constitutes a "particular" machine. Up until Bilski, the Federal Circuit relied on "In Re Alappat"... which held that loading particular software onto a "general purpose" MAKES it a "particular" computer. The Bilski holding said that Alappat was now reversed... but in the discussion, they only talk about how other parts of that case were wrong.
So, is a general purpose computer "particular" enough when loaded with specific software, or not? That would be a very interesting question for the SCOTUS to answer.
Just as an aside... I know this is blasphemy on Slashdot, but not ALL method patents are bad. Method patents traditionally cover things like industrial processes and medical testing, things that actually do require innovation and/or substantial investment in FDA approval. The trick is in writing a rule that filters out crap from patents that actually do make public policy sense. It's harder than you might think to come up with a blanket rule that threads this needle.