Multitouch is all the rage lately, but one of the drawbacks is that it's still pretty expensive. Enter this ingenious device-- it's a bag with dye colored water in it. That bag is then laid flat on a glass table, an iSight camera is placed underneath, the computer is coded (it appears, anyway) to look for fingertips pressing through the dye, and just like that, you've got a multitouch interface.

Really incredible. Of course, it's hard to figure out how this could be used for something like the iPhone-- instead of a camera, you'd have to have some kind of light sensors behind the dye, and you'd have to figure out a way to have the dye-colored water stay spread even throughout the bag. In fact, come to think of it, I'm not really sure how most multitouch interfaces work-- maybe this is closer to the real thing than I imagine. Even if not, very cool idea, and I'm almost surprised to see it really works so well.

[via Waxy]

Update: Looks like the video is a little old-- this was posted back in early June, even before the iPhone was released. But it is still really cool, and it's the first I've seen it.