I sure wish I could have seen this in person. The fine folks at ArtRage were showing off a beta version of their upcoming release. ArtRage is a graphic artist software package that uses Tablet PC functionality to enable realistic creation of water colors, oil paintings, chalk drawings, and much, much more. This new version includes a lot of new functionality, including the use of the Windows 7 multitouch APIs. As you can see in the YouTube video, touch enables real "painting" with a brush, giving artists the feel and interaction of non-digital art.

ArtRage demo from PDC

If you're not familiar with ArtRage, take a look at their Starter Edition. It's got a limited set of functionality, but it still shows off the awesome selection of capabilities. The full version is absolutely worth the nominal fee that they charge.