I found a video at John Chow's blog which shows off the capabilities of the Microsoft Milan concept surface computer.
The video was made by Popular Mechanics and the capabilities of this device look pretty cool. It's able to recognize physical objects from a paintbrush to a cell phone and allows direct interactive control.
Microsoft Milan Surface PC video
Posted on Wednesday, May 30 2007 @ 20:56 CEST by Thomas De Maesschalck