This is a very intelligent and cool concept that will likely progress from here.  Jinha Lee who is a scientist at MIT made this really awesome video on pushing the limits on what we think input actually is in regards to a computing device.  He describes this demonstration as such:

When pressed against a screen, Beyond collapses in the physical world and extends into the digital space of the screen, such that users can have an illusion that they are inserting the tool into the virtual space.

It almost seems obvious in retrospect.  How many programs that simulate 3 dimensions like Autocad, SketchUp, and even Photoshop and Illustrator would benefit from such an interface?

Check out this cool 3D screen in the video on the next page

Next Page »