Touch screen using Water.

It is truly awesome, the Minamo by Taichi Inoue (Minaemo means "Surface Water" in Japanese). By putting a monitor under the tank, you will control the mouse pointer on the water surface, it is so cool.

Check it out:

AVR Touchscreen interfacing.

Sparkfun.com made an AVR based USB Touchscreen Mouse, basically you attach a resistive touch screen to AVR IO pins and get the x and y coordinates with some calculations, after that sent to your computer using serial or usb port. So you will have a touch screen mouse or drawing pad. They used a PSP touch screen which also ready @ sparkfun store, the tutorial is very detail and clear, codes are included too, thanks guy who sent in.

Check out the demo video:

USB AVR Touch Screen from Sparkfun on Vimeo.

Tutorial:
The AVR based USB Touchscreen Mouse