In essence, once implemented this would enable a multitouch surface to act like one big keyboard and mouse combo – think the iPhone's keyboard (on steroids) combined with a Wacom tablet, and that's just the start of the possibilities such a device allows.
Naturally this patent application has people buzzing about the long-rumored tablet, but properly realized this device could easily be applied to any Mac as a one-stop replacement for the keyboard, mouse, and any other number of input devices. That said, this may just turn out to be one of Apple's many phantom patents – the company often patents concepts without ever bringing them to fruition. Still, the thought of one day being able to tap away on a glass surface that you can manipulate into any configuration you want? Make it so, Apple.