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Milan
At first glance, Microsoft's secret project looks like a 2007 version of the sit-down arcade game Ms. Pac Man. Only if this machine were running the game, you could just take your finger and flick away any monsters chasing the heroine.

Microsoft on Wednesday is taking the wraps off "Milan," five years in the making and the first in what the company hopes will be a long line of "surface computers." The Microsoft Surface tabletop PC called, for which Microsoft has created both the hardware and software, offers shades of the technology seen in the sci-fi thriller Minority Report. The whole unit is controlled entirely through touch--there's no mouse or keyboard.

To paint, people can pick up a paint brush or just dip their fingers in virtual paint cups. Sharing photos is similarly intuitive. A stack of pictures can be easily sorted through and shared. To resize a photo, just stretch two fingers apart. Pivot the fingers and the image rotates. More than one person can be interacting with the computer at a time.

"It's very approachable," said Pete Thompson, the former T-Mobile executive who runs Microsoft's surface-computing business. "You just want to touch it."

While consumers will be able to touch it later this year, most won't be able to buy a surface computer any time soon.

The expensive components required to allow multiple users to touch the device simultaneously give it a price tag approaching $10,000. As a result, Microsoft isn't targeting homes initially, though it hopes consumers can own their own Milan within three to five years. For now, Microsoft is focusing on getting the products into public spaces in the hospitality arena--hotel lobbies, restaurants, and casinos, to name a few.

The company's initial customers are cellular carrier T-Mobile, which will use the units in its retail stores; hotel operator Starwood, which owns brands including Sheraton and Westin; casino owner Harrah's and slot game maker IGT. Each of the initial partners should have a few initial machines up and running around November, Thompson said.

Thompson said the roll-out approach is similar to that taken by the tech industry with plasma displays, which were used in trade show booths for years while they were still too costly for the home.

Sheraton Vice President Hoyt Harper said Microsoft's tactic is pretty savvy, noting that many guests who might see the product in a Sheraton lobby could easily be among those who will buy one when it finally does go on sale widely. "I think that's one reason they chose us," he said.

Harper said the computers fit perfectly into his company's efforts to turn its hotel lobbies into destinations rather than merely places people stop on their way somewhere else. That, he said, makes them easily worth their high price tag.

"How can you not take advantage of something that could materially change the guest experience in the lobby?" Harper asked. Initially, Sheraton plans to have three Milan machines at hotels in New York, Boston and Chicago, with two in each lobby and one in the club lounge. If that means folks are lining up, he said, all the better.

"It will be a nice problem to have," he said.

Another consideration, in addition to cost, is how well Milan holds up to wear and tear. Harrah's CIO Tim Stanley wants to make sure the machines are built to last before he starts placing them in casinos on the Vegas strip.

If he puts one in the Pure nightclub, for example, "they might dance on (the) table," he said. "Can it handle that?"

The guts of Milan
At its core, Milan is powered by a fairly standard high-end Vista PC with an off-the-shelf graphics card, 3GHz Pentium 4 processor and 2GB of memory. To make the touch screen work, Microsoft crams a lot of other stuff into its tabletop unit. Underneath the roughly textured scratch-proof and spill-proof surface covering the top of the unit, five infrared cameras sense fingers or other objects touching the surface, while a DLP projector turned on its side generates the screen image people see.

To show off the technology to the public, Microsoft has written a few demo applications, such as the paint and photo apps, as well as a program in which specially tagged clear tiles make up a jigsaw puzzle. Instead of a still image, however, the tiles are part of a moving video (it's harder than it sounds to put together).

But Microsoft has hooked up its partners with a handful of software companies it has certified to write Milan-compatible programs. The company isn't making the technology widely available to developers, though it may do so down the road.

Microsoft is not alone in the arena of multitouch computing. NYU professor Jeff Han wowed the crowd at the March TED (Technology, Entertainment and Design) conference with a similar technology and has launched a start-up, Perceptive Pixel, to commercialize it. Apple has also gotten patents in the area and has talked about the use of multitouch in its upcoming iPhone.

Still, Thompson said he isn't worried about infringing anyone else's technology.

"Our legal team feels really good about our IP situation," Thompson said.

The Milan effort began during a series of conversations between Microsoft researcher Andy Wilson and hardware designer Steve Bathiche. The team presented the idea in 2003 to Microsoft Chairman Bill Gates and started working on prototypes.

Microsoft itself has launched other ventures in this area, largely through Microsoft Research, which has been demonstrating projects in this realm for years. It even licensed a derivative of the touch technology to a medical-imaging company last year. Another version, dubbed PlayAnywhere, is a mobile take on surface computing, using a can-size projector and camera to allow any flat space to be turned into a computer.

As for Milan, the software maker hopes to get the technology into lots of other areas, such as the education market, in addition to into consumers' hands. Although the initial customers are getting the same tabletop design, Microsoft says the product will eventually come in other shapes and sizes, including vertical, or stand-up units.

It's the interface that makes the difference. Not only is it easy to use, but unlike traditional computing, it's not an isolating experience.

"We're all connected through MySpace.com and have all these virtual worlds and virtual friends but we don't do a lot of socializing like this," Thompson said, pointing to several chairs seated around the Milan device.

CNET News.com's Greg Sandoval contributed to this report.

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