The tech works by using two projectors (as shown above) and a diffused surface. One image is captured on the screen surface as the diffused material stops the light travelling beyond that.
The light which makes up the image from the other projector passes through the diffused material and is then captured by items placed above the actual surface of the device.
This allows the standard Microsoft Surface functionality but adds more ways in which you can interact with the information above the actual screen.
Photo credit: Tim Ferguson/silicon.com