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Before the iPhone, touch was mostly a gimmick. There were very few touch interfaces that I really felt worked well. Touch panels in airports, home automation systems and even smartphones w...

Everywhere. I want to feel as I'm doing the change in technology.
Bathroom to on the lights, on water cold hot. listen to music from my computer in the shower. Able the see my computer screen from the shower.
Fridge: add and remove food, allow you fridge to make you food defending on your supplies.
Open the blinds with a slide of your hand. O my so much to do
KITCHEN: We are renewing a house and I will build in a 20-26 inch touch screen pc in the kitchen wall or cabinets. This will be used to listen to music, radio, watch tv and look up recipes.
OEM touch screens for building in are not very attractive yet for this project: no HD nor 16:9 resolutions and very expensive. I will probably dismantle an MSI Wind Top 22", but it's not perfect either. Ideally, I would prefer to buy the Wind Top's screen as a peripheral and build a fanless htpc / kitchen pc myself.
AROUND THE HOUSE: I usually take the laptop with me around the house to listen to internet radio and read stuff. A neat, high-res tablet would be much more convenient (i.e. an Iphone four times the screensize)
It'd be fun to play those older 3Dshooters with touchscreen. Just point at the enemy,an fire!
I find touchscreens make sense on netbooks, but not on ebook readers.
I think touch screens on *laptops* make a lot of sense. Windows 7 and Office 2007 are both designed with touch and multi-touch in mind. Not having to connect an external mouse and not having to use a small touchpad would be a welcome change.
Until now touch screens have had limited use, primarily because of the hardware they are associated with. i.e PDA/Smartphone or Tablet pc's, I would like to see more powerful GPU/CPU's for Design and gaming Workstations/Laptops/Tablets, with Touch screens on large monitors as well as Touch Screen HDTV systems. This would not only make it more universal but open up new areas for interactivity, creativity, entertainment, business presentations and education. A large touch screen instead of a chalk/whiteboard and touch screens for the students that link to them instructors screen....
In laptops, I would like to see the touchpad replaced with an LCD touchscreen. Ideally, the extra display should not be considered a secondary monitor, but the display would be programmable through a GPU-like interface.
To me, touch is just another interface that makes interaction with a computer richer. I'd like to see ALL LCDs come with optional touch screens so the user can decide when and how they need to interact with their programs.
Touch is just one component of future input device paradigms, but keyboard and mouse aren't going away any time soon(i.e. decades). The main reason being that it is still the most efficient device right now. As others have mentioned, big fat fingers make small MID/tablets/netbook lcds very cumbersome to use. Text links and menu headings in tool bars are just to small. gestural commands and multitouch will help, but the precision and minimal ergonomic requirements of the mouse still trump any intuitive advantage of touch.
Websites and other programs will have to be redesigned with larger buttons and dialog boxes for touchscreens as well as different menu concepts since hovering over an area then clicking is not applicable with touch. You are either touching it or not, a separate click function doesn't exist unless pressure sensitivity is added.
I agree that touchscreen keyboards will be a massive boon for higher end applications. I do 3D modeling and animation and the number of keyboard shortcuts required frequently demands finger gymnastics rivaling an octopus given the number of alt/shift/control modifiers. A single keypad sized area on a touch lcd keyboard with multiple modifier keys in the spacebar area would reduce the dexterity requirements and the time wasted lifting the hand to reach the other side of the keyboard.
For 2d applications, I have a tablet notebook with digitizer pen. For photoshop or painter, it makes drawing massively more natural and intuitive much like the Cintiq's advantage over standard digitizers (intuos/graphire/etc).
As for when to include touch with hardware:
-In a print layout/text entry setting, a large 30+ inch display with touch input set at adjustable angles like a drafting table would be my replacement for office/business desktop boxes.
-For 2D art applications, a 19-24 inch touchscreen on a swivel arm with 3 axis freedom of movement combined with various digitizer pen accessories would be my choice.
-For casual gaming/simple browsing/and IR remote control surrogate, a 5-10 inch tablet makes more sense. These are handheld devices that should only have thumb keypads or finger dragging.
-For notebooks, touch should only be used on convertible tablet models. Notebook/netbook/laptop are in an ergonomic deadman's land. They are too heavy to hold in one hand and do much more than scribble and tap with a stylus, and any serious data entry means you should set it down and use the keyboard which obviates the need for touch. The pixel dpi usually mean you are holding them relatively close to your face which leads to fatigue.
If a touchscreen isn't in a kisok, mounted in a desk/table, on a swing arm, or small enough to fit in your hands it doesn't work.
I think touchscreens are the way to go. I think for graphic aided design there would be a huge jump in creativeness. For any kid, using their finger is easier to use,learn, manipulate than a mouse will ever be. The only drawback is typing, the onscreen keyboards can take up too much room on the screen, so if a system were to go touch only, then a second screen should be an option. This could/will be alleviated when pen input recoginition gets to their point where it is faster to write then type.
Touch screen is a requirement for me to ever buy a laptop - not because I actually need it for anything, just because I'm stubborn and I have decided that if a system would advertise its mobility, it should go all the way and be a tablet convertible.
I have a gigabyte M912X netbook tablet convertible, and I love the concept.
In comparison with today's netbooks it has poor battery life even with the extended 6-cell battery, its display isn't too great, changing brightness with the slightest viewing angle difference, and its weight is probably on the high side. Even its touchscreen functions aren't stellar, with a little problematic sensitivity at the edges of the screen and requiring a bit too much pressure in general.
But I still would prefer it to any other netbook that is out today. I don't consider even ASUS T91 or T101 better than it, because of their lower display resolution, making them unusable in portrait mode for browsing any websites at all. BTW, those ASUS tablets were a real let-down because of pre-launch hype touting "multitouch" without clarifying that it applies to the stupid touchpad and not the screen.
Anyway, back to the topic - I am a big fan of the idea of touchscreens, and I can imagine a very nice implementation for computers in the near future. I think its an important, and long overdue, step in the progress to even more revolutionary interfaces.
There are some problems and inconveniences with it, but it would simply take a designer that's actually tried using touchscreen to find and solve these.
For example one very common inconvenience with using touchscreens instead of a regular mouse is the fact that they operate on a 'touch-to-click' principle, and it is not possible to just move the cursor and point at some element without clicking it. That makes it a problem to use them with interfaces that rely on mouse-over or hover interactions.
It's not rocket science to solve that problem, allowing some simple switch to a 'touch-to-point' mode, where clicks are done using a button on the pen or on the screen bezel.
Another common problem is the fact that, having to touch the screen, your finger physically obscures the area immediately around the cursor, making it hard to position it precisely. Of course applications that are designed with touch in mind will not have elements so small that this will be a problem, but for using touchscreen with old mouse-age applications this is sometimes an issue. Having a stylus helps in such situations, but it's also possible to design a solution for when you're using your fingers - simply allow the "mouse" cursor to be dragged by grabbing it at some offset in any direction instead of directly in the center. This would also allow precise interaction with elements at the very edge of the screen, another thing that is sometimes very troublesome with touchscreens, even when using a stylus.
For the desktop touchscreen might be a little uncomfortable, but some people might end up liking it still - we will never know until we try it. So we have to try it.
Besides, its ideas can be extended to some other similar interfaces not based on a physical touch, like using a wee-like controller as a "laser pointer" (would work really great with your TV remote and your HDTV/HTPC setup) or using eye-tracking or hand gestures or even a brain-computer interface like the OCZ NIA.