Freeofluid is fluid with suspended nanoparticles that can be affected by a magnetic field. (See link.)
How about a touch interface that sandwiches a ferrofluid between two layers - bottom layer rigid and top layer semiflexible? A magnetisation grid exists below the rigid layer and drives the ferrofluid
to raise and lower dynamic 'bumps' on the semiflexible layer.
This can be used to provide tactile feedback to touchpad interfaces. This would help solve a long-standing problems with touch interfaces - no tactile feedback is presented to the user. (That's the reason people miss buttons on the Apple Iphone )
If the magnetisation grid could also 'sense' the changes in the magnetic field caused by the user pressing the bumps it creates, it could also act as the touch sensor. Otherwise alternative touch sensor tech could work (Capacitive, SAW,...)
If the ferrofluid is transparent, instead of an opaque touchpad, touch screens can be created.
United States Patent 3972595 shows a 1975 patent application which uses opaque ferrofluids in displays device by 'drawing' bubbles across the surface.
UPDATE: Heh - part of my idea already exists :)
Right after I submitted, I thought to search for 'ferrofluid tactile interface' on Google and the first link is 'SnOil' :) - proves that there is nothing new under the sun. However it uses tilt sensors instead of touch sensors - I get the feeling the user is not meant to touch the screen.
UPDATE 2: Another idea better suited to a touchscreen because of transparency is not using a ferrofluid at all - Instead, use a air pump with a fine mesh of air switches to inflate/deflate sections of the semi-flexible top layer very quickly. Again, if air pressure variation is measured using a sensors grid, that could sense user touch.