Given that at least half my "audience" reads Wired, you've probably seen this; but, the reacTable is pretty cool.
I'm not sure if it will ever be anything more than an alternative to the Theremin, or if anyone other than Bjork can do something with it; but it's an interesting project.
I can see people using it in the studio, to set up a sound (like a mutated beat) and then using it, or editing different things together, but using it live seems problematic.
On the off chance you don't know what I'm talking about, here some YouTubules:
Bjork - Pluto