Already lots of excitement about this in the GBM Forums. The Magic Paper interface was developed by a Microsoft/MIT Alliance and allows you to sketch objects that depending on their “distinct meaning” can inter-relate. For example, wheels and axles can be “understood” and operate like a wheel and axle when you press the go button. Magic Paper seems to be the nickname for what they are now calling Natural Interaction. If this reminds you of the Physics Illustrator power-toy, there is a reason.
There is a download link on the webpage but I do believe it gives you a link to the Physics Illustrator powertoy. So, I’m not sure if this is a revision of that powertoy or just a name change/marketing push, but we’re in touch with the folks at MIT to see what more we can find out about this.
Here’s a video of this in action.