The Microsoft Research department have been working on a project called "Skinput" developed in conjunction with a Carnegie Mellon grad student.
The project was recently featured at Microsoft's 'TechFest'.
Without purporting myself to be a tech-head, the system can "sense and distinguish among the waves that run through your arm or hand depending on where, precisely, you touch or tap". The video below provides a pretty neat and easy explanation.
Skinput is technology that uses the human body for acoustic transmission, allowing the skin to be used as a touch screen
Initial tests evaluated the effectiveness of three input locations - the fingers, the forearm and the entire arm
The gadget's developer Chris Harrison said the human hand could eventually replace touch screen phones
Skinput works by sensing sound that travels through the body. Mr Harrison says different parts of the body produce difference sounds
The Skinput's armband holds bio-acoustic sensing arrays that detect vibrations as they travel up the arm
A closer look at the inside of the Skinput's armband showing the two sets of vibration sensors