Microsoft Research is an amazing incubator for advanced technology, though of course they have problems actually moving their technology into the market.
One of their inventions which never quite made it out into the world is a new form of touch screen which could not only display items but also see your touches and gestures, much like in the picture above.
The technology, published in a 2011 paper, is an all-optical system that could sense both gestures and touch using optical lightguide technology both to provide the backlight for an LCD, and allow imaging through it, both on and off the surface of the screen.
The system used a wedge-shaped display surface with edge-mounted light sources and cameras. The cameras allow the display to both sense touch by the tiny deformation of the surface but also see off-surface gestures.
The technology was eventually superceded by capacitive touch screens, which while effective and cheap did not have most advantages of the all-optical screens.
The technology is demonstrated in a video by Microsoft Applied Science, demonstrating the technology for video conferencing, much like in the header image above.
Read all the detail and how Microsoft solved all the issues and difficulty with the technology in their paper here.