Project Milan is in fact a touch-sensitive table as you guys speculated and we reported earlier. Dubbed "Surface" and five years in the making, it's set to establish a paradigm of what Microsoft calls "surface computers" which use touch as the sole method of input.
Painting with surface sounds particularly intuitive (and fun): you can use a paint brush or simply dip your fingers into virtual paint cups. Photo resizing and stacking works much like the iPhone's zoom gestures. Also cool is the capacity for multiple users.
Such sweet tech comes at a price, naturally, with the units running $10,000 a pop. But, Microsoft expects prices to plummet over the next three to five years to the point they'll be in your homes. In the meantime you'll be able to play with them at T-Mobile stores, Harrah's and Sheraton hotels. Got more questions? Hit the jump for a FAQ and (naturally) a boatload of pictures. Update: And a video!