I came across this during some VERY last minute holiday shopping this week.  As part of Macy's "Believe" initiative they are donating $1.00 to the Make A Wish foundation for every letter to Santa children drop off at a Macy's postbox this holiday season. To augment the program, the Macy's flagship store in Herald Square has installed three interactive touch displays that entice children to construct and send their own letter to Santa while standing outside in the freezing cold.  Children are taunted instructed by on-screen elves to write their letter by scrolling through a grid of gifts and a couple dozen pre-written sentences such as "I only pulled my sister's hair once this year".  

These thru-window installations are gaining popularity with retailers, and becoming more common in displays throughout the city. From the looks of it, this displays uses what's called "Projected Capacitive Touch" (PCT) technology.

Here's how it works.  A transparent material is etched with two parallel layers of conductive Indium Tin Oxide (ITO) foil. The material is installed between a window and an LCD screen or a rear projection setup.  By applying voltage to the material, a grid of capacitors is created so that when a finger is brought  close enough to the surface it will change the local electrostatic field. The change in the field can be measured on the x/y axis of the grid, and the exact location of the change in capacitance can be determined relative to elements on the display screen.  So, for example, if a 100 x 100 pixel button appears on a screen with the coordinates of (50,150,150,50), a touch registering anywhere on the ITO within those bounds can be recognized and trigger an event.  Some foils, such as the ViP Interactive Foil from Visual Planet, can even be programmed for various glass thicknesses and is sensitive enough to be used with gloved hands, which is evident in the video above.

The challenge in building interfaces of this type is twofold.  First, the grid needs to be calibrated so that any change in capacitance corresponds as closely as possible to the same area on the display with the interactive elements.  Second, and more difficult, the interface design needs to provide touchable areas that are large enough and spaced enough apart to provide an experience that seems responsive.  Most of these screens fail in that area.  Too many complicated elements are crammed onto the screen and you are left with an interface that registers incorrectly or doesn't respond at all.  In the video above you'll notice the difficulty the woman has with entering the child's initials at the end.  The letters on the wheel are simply too close together and too small to provide a consistent and accurate mapping of the field change to the button. 

Overall, the technology involved to build one of these displays is getting cheaper and cheaper.  Eventually the real clever interface developers will be able to elevate these installations beyond the novelty phase with smart experiences designed around the limitations and constraints of the technology.  People will embrace them.  They will rejoice.  They will scream it from the rooftops, and businesses will eventually find ways to use these screens to provide additional value to their customers.