- Capable of more buttons than any console controller ever (except that big honkin' PSO Gamecube keyboard).
- Context-sensitive buttons, changing as your status or position in the game changes.
- Could allow for MMO-style action bars; a traditional controller has a hard time making, say, 10-15 spells fit comfortably. Now imagine you can just touch a spell icon to cast it.
Problem with buttons on touchscreens: you have to look at the touchscreen. Somewhat cumbersome if the action is on your T.V.
Other than that, seems like most of the ideas involve moving the HUD off your T.V. Seems nice but ultimately superficial.
Augmented reality, I feel, depends a lot on the performance of the system. If it's not accurate/fast enough, people won't use it.