The BumpTop™ prototype
What was needed was a innovative interface, we needed a paradigm shift, and it's possible that BumpTop (via Second Life Insider) might be it. Watch the video, it'll explain the interface a lot better than I could in words, but in summary "Why didn't I think of that..."
Of course if you took the multi-touch hardware interface from the new Apple iPhone and combined it BumpTop with a tablet form factor, and maybe you've got something. Anyone paying attention over at Apple..?