From Popular Science:

The future of touchscreen interfaces is: you? A project between a Carnegie Mellon researcher and a couple of creative thinkers over at Microsoft Research have created Skinput, a Bluetooth-enabled device that allows you to use your own skin as a peripheral input device for devices like cell phones, MP3 players or gaming consoles.

This is one of those things that's better shown than explained:

It's clearly a long way off from commercialization. But as they've demonstrated, this has a lot of potential for keeping devices in pockets and out of hands, allowing people to stay focused on their activity rather than on operating their devices. This also seems like one component of a potential future system that converts sign language communication to synthesized speech.

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Updated the article with a new YouTube video... not sure why the old one died.

The video has been removed already...