I figured it was mechanical.
It's ironic that the "click" is a throwback to when mice were first designed, but it doesn't have to be that way. We no longer need to hear the click in such a dominant way. The fact that the Magic Trackpad has a means of turning off the click sound indicates this. Of course, all touch screens don't have a sound when tapped with a finger.
Since using this Magic Mouse for the first time, the click sound is very dominant. It's like it's announcing, "You have clicked! You have clicked!" with every selection.
I can only hope a future design includes a way of controlling the click sound.