David Merrill demos Siftables | Video on TED.com
This is one of the coolest demos I've seen in a long time. Imagine using this kind of technology with machines that move themselves - you'd have not several independent robots but one large, disconnected robot. The idea is really incredible. Imagine that the range is increased a bit from touching to a few feet and now you have extended chains where each link can react to local stimuli and then as a group be able to define a group purpose based on the collected information.
I hope they do a lot more with this technology. It was wonderful seeing it in action.