You've probably seen this video already, but here it is again if not… This is great work from Microsoft Research exploring the possibilities of combined pen and touch input. It was presented last week at the CHI 2010 conference.
You can read more about this work at Ken Hinckley's blog: Alpine Inker.
Manual deskterity: an
exploration of simultaneous pen + touch direct input
Authors: Ken Hinckley, Koji Yatani, Michel Pahud, Nicole Coddington, Jenny
Rodenhouse, Andy Wilson, Hrvoje Benko, Bill Buxton.
I didn't go to CHI but I've just started browsing through the proceedings. There are many, many touch-related papers and I'll try to highlight several of them here in the coming days.
(Image from Ken Hinckley's blog.)