Microsoft announced this technology last year, introducing it for customer use in AT&T stores recently this year.  It is a combination of various technologies, essentially an extension of touch screen technology.  In the home, it could be a full featured computer inside a coffee table, controlled entirely by the user's hands.  When combined with Bluetooth, you could simply set your ipod or cell phone down on the surface and it would automatically interface with it.  It could even charge these devices.

Due to its innovative touch interface, Surface can recieve input from non-digital objects.  If you wanted to paint, you could just run a regular paintbrush across the surface and it would respond to the input.