Sixth Sense at MIT labs

'The SixthSense prototype is comprised of a pocket projector, a mirror and a camera. The hardware components are coupled in a pendant like mobile wearable device. Both the projector and the camera are connected to the mobile computing device in the user’s pocket. The projector projects visual information enabling surfaces, walls and physical objects around us to be used as interfaces; while the camera recognizes and tracks user's hand gestures and physical objects using computer-vision based techniques. The software program processes the video stream data captured by the camera and tracks the locations of the colored markers (visual tracking fiducials) at the tip of the user’s fingers using simple computer-vision techniques. The movements and arrangements of these fiducials are interpreted into gestures that act as interaction instructions for the projected application interfaces. The maximum number of tracked fingers is only constrained by the number of unique fiducials, thus SixthSense also supports multi-touch and multi-user interaction.'
http://www.pranavmistry.com/projects/sixthsense/index.htm



'But the current prototype promises to be a bit more consumer friendly. It consists of a small camera and projector combination (about the size of a cigarette pack) worn around the neck of the user. An accompanying smartphone runs the SixthSense software, and handles the connection to the internet.'
http://news.bbc.co.uk/1/hi/technology/7997961.stm
The miniaturization of the camera/projector means that any surface can be used as a the display. Presumably the projector adjusts itself depending on the distance it is from the surface being projected upon and presumably it is also able to focus on a given surface depending once again on the distance. The cel phone runs the software that  motion tracks of the colored fingers. Using gps technology and internet search the software become exponentially extended.