I have a feeling that it can be used to design UI really effectively. Are there any apps taking a crack at this?
As Einstein has said, imagination is more important than knowledge. From my experience, look at how kids use these things and pay attention to what what they need. They're more intelligent than we give them credit.
Computers are merely extensions of ourselves. The intent must be obvious so as not to confuse. If there is one thing I've learned from Jobs it is this.
EDIT: Look at the Elements app as well as the Al Gore (Push Pop Press) app. There are many holes left in this market where others can cause a disruption to what was the dominant presence on the PC.