My massive issue with exams is that in the real world, there aren't going to be many events where you aren't able to look something up in a book, or on Google... if you can't remember an equation, you would google it... And this is true for so many things...
My other issue, is that some can be very learny, in that, you don't necessarily have to understand the content, just know it, and have an idea of what the exam is going to ask, so that you can apply it...
For example, in my 1st year Economics exam, there was a question which I didn't understand why I was doing what I was doing, but I knew the process of completing the question correctly. That's not going to help me in any way, but I'll still get the marks for it...
I think coursework is somewhat flawed, depending on the help teachers/lecturers are willing to give. My lecturer doesn't give that much help with coursework, whereas I've heard of some who will tell you if you're doing the wrong thing...
I think there's got to be a balance between the two, as they both do things the other doesn't, and so I wouldn't necessarily get rid of them both.
I'm not really sure what practical other ways there are to assess, but what I have found, through chatting informally with a lecturer, is that they can get a good sense of your knowledge through a general chat around the subject (not all subjects this would work for...). For example, with Economics, it's quite easy to have a conversation revolving around the theory of it, and being able to see whether they know about the different parts of it... I guess presentations as well to an extent... Obviously this doesn't work with all subjects, like, I wouldn't know how this could be done with maths subjects...