Interesting article on the Torah by a rabbinical student:
http://www.myjewishlearning.com/beli...Genocide.shtml
Some quotes:
Who is Amalek?
According to the book of Exodus, Amalek is the nation that attacked the weakest among the Israelites as they fled from Egypt. This transgression was not to go unpunished. The Torah has a harsh prescription for Amalek: annihilation.
and
In the Guide for the Perplexed, Maimonides explains further that the command to wipe out Amalek isn't based on hatred, but on removing Amalek-like behavior from the world (3:41). For Maimonides, then, the commandment is not necessarily fulfilled through killing; it can be fulfilled through moral influence and education.
Deuteronomy 20 distinguishes between the obligatory war of conquest against the seven nations of Canaan and other wars. However, according to Maimonides and Nahmanides, the obligation to offer a call for peace is applied to both. Nahmanides, in quoting a midrash, also claims that there is an obligation of a Jewish army, laying siege upon a town, to provide an open direction to escape for those of the enemy who do not wish to fight (Sefer Hamitzvot 5).
Some legal authorities were more eager to remove the command entirely from being applicable in our era. For example, in the 19th century, Rabbi Abraham Sachatchover argued: "If they repent from their ways and accept the Noahide commandments, and they no longer continue in the path of their forefathers, they are no longer held responsible for the sins of their forefathers." (Avnei Neizer Orat Hayiim 2:508)
The Sachatchover Rebbe, like Maimonides, suggests that Amalek is a way of being, not a genetic trait.