Last week I sent the following email to oyster customer services:

"I'm glad to see daily pre-pay is now becoming available with
discounts but the information on fares makes no mention of 1-day
travelcards. I had assumed that a pre-pay Oyster would only debit the
value of the appropriate 1-day travelcard if this was less than your
accrued single fares in a day. Is this not the case?"

Today I received this reply:

"Thank you for your email regarding Oyster card pre-pay. Pre-pay will
be available on Oyster card from January 2004. Initially Pre-pay will
only be available on London Underground and Docklands Light Railway.
Each time you validate your card at the beginning and end of your
journey the single fare will be taken off your Pre-pay account.

From March 2004 you will also be able to use your Pre-pay Oyster card
on London Buses and this is when fare capping will be introduced.
Your card will then recognise that you have made multiple journeys and
will take off the cheapest fare available for the journeys that you
have made.

If you need any further assistance or questions regarding your Oyster
card please do not hesitate to contact the Oyster card helpdesk."