I've done some research which involved the perceptual effects of latency, so I was interested in the test rig from their video and found a paper they published in ACM about it: http://edgey.com/wp-content/uploads/2013/01/p453-ng.pdf

Turns out that to achieve this 1ms latency system (once you have that, it's simple to add artificial latency) they had an FPGA directly processing touch data from a resistive sensor over a 2 MBps serial (optical) connection, computing the center of mass and directly driving a DLP projection display so that parallax between the surface being touched and the display would be eliminated. Nice rig!