Black Box Notes

This one confuses me.

Six electronic voting machines used in two North Carolina counties lost 436 absentee ballot votes in the 2002 general election because of a software problem, raising increasing doubts about the accuracy and integrity of voting equipment in a presidential election year.

Election Systems & Software said problems with the firmware of its iVotronic touch-screen machines, used in a trial run, lost ballots in two North Carolina precincts during the state's early voting in 2002. ES&S, the largest U.S. maker of election equipment, is also the focus of attention into lost votes last month in Florida during a special election.
. . .

In the North Carolina case, a software glitch made the ES&S machines falsely sense that their memories were full and an error message displayed, said company spokeswoman Meghan McCormick in an e-mail to Wired News.

"Because the memory-full message appeared very quickly, some voters did not realize that their absentee vote had not been recorded," she added.

Now it was my understanding that absentee ballots were paper ballots, and therefore not entered via e-vote terminals and certainly not entered into the count by the absentee voter. Is there something wrong with this story, or is North Carolina doing something unique in their absentee voting process?