Touch Of Evil was the last of Hollywood's initial Film Noir cycle, bookending a trend that began with The Maltese Falcon. It's an exceptionally dark film; literally so, because several scenes take place in almost pitch blackness. Like all great Noir films about high-level police corruption, it has a superb sense of authority and gravitas that it takes great pleasure in unravelling in its conclusion.
The opening shot is often cited as the greatest sequence in cinema: a four-minute crane shot following an American couple as they cross the Mexican border. When Orson Welles was interviewed for This Is Orson Welles, he said that, with hindsight, he disliked the bravura of this opening shot, pointing out that there is another, longer, more complex crane shot later in the film. This later shot, in which the camera moves through several rooms of an apartment, is less flamboyant and therefore, according to Welles, more of an achievement.
The film can be seen as a collaboration between two of the greatest icons in all of cinema: Orson Welles and Marlene Dietrich. Welles and Dietrich both have a certain mythic quality about them, and this is especially evident throughout Touch Of Evil. For example, Dietrich's line to Welles, that he has been eating "too many candy bars", reflects their off-screen friendship as much as the motivations of their on-screen characters.
The moral message of Touch Of Evil is more complex than it first appears. In the film, a corrupt police chief (Quinlan, played as a huge, growling, and wheezing old man by Welles) plants evidence in the room of a man whom another police chief (Vargas) believes is innocent. When the planted evidence is found, the audience is also directed to sympathise with the framed man, the implication being that Quinlan planted evidence simply in order to close the case quickly. It transpires that the man is actually guilty, though Vargas subsequently uncovers a long history of corruption and surreptitiously tricks Quinlan into taping his confession. However, Welles's own sympathies lie with Quinlan as he sees the tricked confession as an unacceptable betrayal.
Famously, the film was altered by Universal against Welles's wishes. Some extra exposition scenes were added, and the film was re-edited behind his back. Welles wrote a long memo to the studio, arguing eloquently against the revised version ("In most cases, I can see, or guess, the point of view which has motivated the change, even when I don't happen, personally, to agree with it"), though most of his requests were refused.
In 1976, a longer version of the film was released. This restoration (the version I've seen), while marketed as a director's cut, is more accurately a compromise between the studio's version and Welles's intended vision. It does restore several key scenes originally removed by the studio, though it also retains the non-Welles sequences that the studio forcibly added. Finally, in 1998, most of the non-Welles scenes were removed, and the film was re-edited in accordance with Welles's memo.
One last point: in Touch Of Evil, Janet Leigh stays as the only guest at an isolated motel, staffed by a single nervous desk-clerk; two years later, in Psycho, Janet Leigh stayed as the only guest at an isolated motel, staffed by a single nervous desk-clerk. Admittedly, she isn't murdered in Touch Of Evil (in fact, perhaps to appease the censors, it is made unrealistically clear that she is never harmed), though the situation is strikingly similar nonetheless.