A patent can be issued on a 'improvement of existing technology' basis as long as the improvement falls within certain guidelines which consider the improved product (or portion of that product) to be unique in its own way.
I used to have the patent office wording on file, I'll see if I can find it (dont hold your breath though, Ive deleted a lot of stuff).
Other than that, I have to agree with the sentiments of some other posters. The patent office IS a mess. The process can take oblivion to get through and the tracking down of similar products in violation is near imposible for the agency due to the sheer number of patent requests (its usually up to the offended party to file a claim).
Think of how many times you have seen a product already in the marketplace with the words 'Patent Pending' on it? Many products run the course of their lifespan before they even get final patent approval.