Looking to have the best of both worlds in terms of virtual and physical interfacing, Media Computing Group's developed the Silicon Illuminated Active Peripherals (SLAP) which, as the name suggests, consists of tangible widgets that can be placed anywhere on a surface computer and used for context-specific controls. Examples used are an Optimus-esque keyboard, a slider similar to those found on audio boards, and a knob for video editing. It's a clever approach, sure, but here's hoping future implementations will be able to include a sharper, higher resolution screen. Kindly direct yourself to the links below for video demonstration.
Read - Project website
Read - Video presentation