None of their demos are particularly outlandish. Surface has been duplicated n times; Microsoft has had the best, most polished implementation, that's all. If you look at the real Natal demos, they're certainly doable for a big company like Microsoft. This tablet also isn't anything new; multi-touch PCs have been around for a while.
I'm not even particularly impressed with their interface here. It doesn't have the consistency of design that Apple's does, and it doesn't look particularly intuitive. That doesn't mean that it's vaporware, however; in fact, it probably means the opposite.
Anyway, Microsoft's operating systems are more successful than everyone else's anyway. Windows 7 looks like it will be successful even relative to other Windows releases, no matter what you think of it. The buzz is right, and people are impressed.