Watch this video for an explanation of how "PixelSense" works on the SUR40 and just what makes it special.  A quick synopsis of the process from the Microsoft website lists:

• A contact (finger/blob/tag/object) is placed on the display

•     IR back light unit provides light (though the optical sheets, LCD and protection glass) that hits the contact.

•     Light reflected back from the contact is seen by the integrated sensors

•     Sensors convert the light signal into an electrical signal/value

•     Values reported from all of the sensors are used to create a picture of what is on the display

•     The picture is analyzed using image processing techniques

•     The output is sent to the PC. It includes the corrected sensor image and various contact types (fingers/blobs/tags)