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This is pretty amazing. I think that this coupled with multi-touch interactivity could be pretty revolutionary. It turns the iPad into an "iWindow".

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Yes! As I was looking at the cube, I wanted the viewer to reach out and manipulate it: spin, pinch, what-have-you.

I think the worst thing that could happen is that this sort of experience get baked into the core of the iPad's UI (or the UI of any tablet). But I could see imaging applications (MRIs?) where it would be valuable.

I suspect that touching the screen would, at all but one depth plane, break the illusion. The brain is eerily good at fooling itself, until it receives contradictory information.

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