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The movement delay seems significant. Arching your hand like that with no support of the mouse to rest on seems wrong too. I just don't know what the advantage having mouse like movement without a mouse gives.
The article is confusing because it starts off talking about USB security issues, which are irrelevant.

The main advantage of not having a mouse is that you wouldn't have to have a mouse. One less thing to carry around with your laptop, one less thing to take up space on your desk.

That is, of course, assuming this could be made to work just as well as a mouse, which I doubt. Few things are as momentarily frustrating as a mouse that doesn't register your movements properly, which is why trackball mice sucked so much.

I expected this to be a tiling window manager, probably for OS X given the capitalized name.
This is terrific! The scope for "multitouch" is really exciting.
It's limited, not just click and drag as mentioned before but what about scroll wheel action and additional buttons?
Good research, but I think this is one of those things that stay in the ivory tower, perhaps to one day be a shoulder for the next improvement after the mouse and trackball:

Mom test: 1. Mom asks how do i work this thing w/o a mouse? Tries to touch screen or look for the touch pad. Is then confused. Calls tech support (dad, then siblings... etc..) 2. Scrape fingers on table and get them calloused? No thanks. + would cost to buy more moisturizer.

I always love to be proven wrong though.