The technology exists today to complete this as a shippable product.
Microsoft Research, existing tablet technologies, Surface, InkSeine, Codex and a UI by the Zune/Xbox teams would be enough.
Microsoft has never been terribly good at getting its various business units together to complete a project and market it but it seems to be changing. The Office fluent UI team and the Windows 7 UI team seem to be on the same page now as an example.
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