When Luke returns to the homestead, he finds them in a state quite unlike anyone else we see in the series. What, precisely, did the stormtroopers do to them, and why not just shoot them?
This is just conjecture based on circumstantial evidence:
I believe it's highly likely they wanted the destruction to look like the work of the Sand People.
First, The Stormtroopers were riding Banthas, which threw Luke, when he saw what happened to the Jawas. Obi-Wan wasn't fooled, but originally, Luke thought it was the sand people.
I think that this was likely intentional. The Stormtroopers had all sorts of vehicles they could have been using. As soldiers of the Empire, there's pretty much no vehicle they couldn't gain access to, so why ride banthas at all? The only reason I can think of is that they wanted to make it look like a random Sand People raid. Keeping order in the empire is hard enough without giving people even more reason to want to rebel. Imperial soldiers slaughtering innocent Jawas and moisture farmers would certainly not have gained any love for the Empire, particularly on Tatooine, which was near the edge of Imperial control. It is controled by the Hutts, and contains Mos Eisley, the most wretched hive of scum and villany.
Quite simply, it was likely more prudent to simply make it look like the attack of hostile locals rather than stir up any more trouble for the Empire. Burning the bodies isn't the style of the Empire, so it's the perfect way to make it look like the work of the Sand People.
Come to think of it (and I don't have time to look up the movie to see the quote) I'm pretty sure that Obi Wan thought the same thing.
When they were examining the attacked jawa crawler, Luke said something about it being a bigger target than what the Sand people normally hit, and Obi Wan said something to the effect of "This wasn't the work of Sand People - although we're meant to think it is?" before pointing out that the blaster strikes were too accurate for Sand people.
If you watch this documentary, about the men of the Imperial Forces, you will get a better understanding.
These Bad Boys came to check out Owen and Beru as a response to a domestic disturbance report.
Alternate fan-fic is fun!
Updated with new live link after the original link went dead.
According to Wookieepedia's Legends article on Owen Lars, Owen and Beru were killed by stormtroopers' blasters before their bodies were burned by flamethrowers.
The stormtroopers attempted to make their work look like that of the Sand People. They have an obvious reason to do this -- the Sand People are a well known threat to the residents of Tatooine, and it's very bad publicity for the Empire if anyone knew that Imperial stormtroopers had murdered defenseless citizens. Moreover, the preceding scene shows that the stormtroopers also attempted to blame the Sand People on their attack on the Jawas:
Luke Skywalker: It looks like Sandpeople did this, all right. Look, here are Gaffi sticks, Bantha tracks. It's just I never heard of them hitting anything this big before.
Ben Kenobi: They didn't. But we are meant to think they did. These tracks are side by side. Sandpeople always ride single file to hide their numbers.
Luke Skywalker: These are the same Jawas that sold us R2 and 3PO.
Ben Kenobi: And these blast points, too accurate for Sandpeople. Only Imperial stormtroopers are so precise.
However, the problem for the stormtroopers is that Sand People use gaffi sticks or Tusken Cycler Rifles which fire projectiles, not blaster bolts. If the stormtroopers had simply killed Owen and Beru with their blasters everyone would suspect the Empire rather than the Sand People. Consequently, the stormtroopers burned Owen and Beru's bodies to hide the evidence of their murder by blaster bolt. With nothing left but charred skeletons, a casual observer would suspect the Sand People. Again, the Sand People are a well known threat, and besides, why would Imperial stormtroopers take any interest in a simple moisture farm on a poor Outer Rim world like Tatooine? Luke himself would have been fooled if not for Obi Wan.
I believe the stormtroopers shot them and then proceeded to incinerate the remains, as Wookieepedia says.
It's under the "death" section.