The system uses transparent rubber, an overhead camera and an LCD panel that emits polarised light. The camera detects the diffraction of light as it passes through the three-dimensional transparent rubber, interpreting your moves and the force you apply to its surface. According to Koike, you can apply this for many things. One example: a three-dimensional model of the brain for surgeons to practice on. I can think of less elevated examples, Hideki.
There's only one disadvantage: the overhead camera. The problem is that the user's hand can get in the way sometimes, which will give erroneous results. They are planning to embed the camera inside the LCD. [New Scientist]