My strategy to combat this problem is not extremely unique or innovative, but it does seem to be effective. I create a handout filled with excruciating detail containing almost everything I would say during the course of a discussion section. The whole handout preparation process typically takes 9-12 hours, and the resulting document is 6-10 pages. Note: this is distinct from the sketchy lecture "outlines" many professors hand out, which are often too brief and high-level to be of much use.
With my handout confidently in hand, students who usually spend the lecture, head in their notebooks scribbling furiously, now raise their attentive faces and concentrate on the subtleties of the lecture which I cover orally and with a few sketches. The thrill of seeing students' nodding, understanding visages during a lecture rather than tops of heads that are buried near a wildly vibrating pencil is a rewarding experience.
Often, I will prepare a transparency of the handout itself and use this to guide my lecture. This way the student wins on four fronts:
The only problem that can be foreseen with a total embrace of my technique is that students may feel it isn't worth attending class, since the handout covers everything that was discussed. Empirically I have found this doesn't happen, and that discussion attendance did not drop off as the semester advanced. I believe the reason for this is that students feel they can understand the material better if it is explained to them first, rather than trying to study it entirely on their own.
My proof of this method's effectiveness is not very rigorous, but quite convincing to me. For the past two semesters my course has had midterm evaluations, which asked students to write down comments / suggestions / improvements. Overwhelmingly, students mentioned that the handouts were crucial to their understanding, and most wondered, as I did, why other GSIs didn't follow the lead. Comments such as "I never would have gotten through scan conversion (a topic covered in the course) without the handouts" were not uncommon. Although perhaps not a strictly rigorous proof, I felt confident the technique was effective based upon the comments received.
In summary, I have presented an idea which allows student to have the best of both worlds: they can listen to the lecture attentively and also have perfect notes. From the overwhelming student enthusiasm I've received regarding this method, my only explanation for why others don't prepare handouts is the massive time investment needed to create them. Based upon my experiences with students, it is well worth it for their educational benefit.
I don't know if you remember but in any case, I read your WWW page (I just got Netscape up and running. 8-) and came across your teaching effectiveness essay. Your main point was that very detailed handouts helps the students very much. Well, you'll be glad to know, I agree!
I think your style differed from mine, in that you probably prepared handouts AHEAD of time. I simply created a general outline for myself ahead of time, and based on what I got through in discussion section, I created detailed handouts AFTER the class.
You mentioned that in midterm reports, students have said "I would have never gotten through scan conversion without the handouts." You'd be happy to know, I'd gotten similar remarks. Many students have responsded by saying that my notes were pretty useful. And since discussion section can be pretty short, these notes also supplemented any area which wasn't sufficiently covered.
The notes also saved me time, in my opinion. When I was a lab assistant for several semesters, I'd often get the same questions over and over again. I think the overhead put in creating the handouts you suggest will pay dividends down the line by helping students learn, and also by reducing the number of repeat questions at 3:00AM in the mroning. 8-)