The four digit PIN isn't the only vulnerable component. The implementation has many issues too.
Here are some articles that IThe Security Group at the University of Cambridge Computer Laboratory maintains a blog and they have bookmarked related to this issue,explored many vulnerabilities in chip and pin system. Here is an article that will provide further informationthey have written on this issuechip and pin:
And Register has another one about threats to researcher trying to highlight these issue: http://www.theregister.co.uk/2010/07/06/atm_security_talk_pulled/