Rumors are flying that Google is about to introduce a tablet device to compete with Apple’s iPad. It seems to be more confirmed than rumor, given that Google CEO Eric Schmidt recently talked about an Android-based device at a party. This really isn’t surprising, since Google has been aggressively pursuing new markets, from Google Docs (competing with Microsoft Office) to the Nexus One (competing in the smartphone market).

The clincher for me was Google’s recent acquisition of BumpTop, a firm whose product is a 3D desktop with multitouch capabilities and a very intuitive interface. The software, when installed on Windows 7, takes over as the primary user interface and looks like the view of a room from the corner of a wall and a ceiling. You can put objects on the floor or walls (where the default interface includes widgets for Facebook, Twitter, and a sticky note application) and have the ability to group objects into “piles” by circling them and choosing an option from a circular menu.

For people who have devices capable of using a multitouch interface, the BumpTop includes even more functionality. You can sweep icons out of the way with the side of your finger, rotate the desktop to view walls or the floor with two fingers, and throw documents around the desktop (and see them interact with other icons as they bump into one another). These videos show a number of techniques that can be used in a pen based environment, as well as more available in a multitouch environment.

No discussion about tablet devices would be complete without talking about the recent tete-a-tete between the executives at Apple and Adobe. This ongoing battle has included an open letter from Steve Jobs regarding the shortcomings of Adobe’s Flash, an interview with Adobe CEO Shantanu Narayen in which he responded to Jobs’ charges, and Adobe CTO Kevin Lynch likening Apple’s behavior to anti-competitive practices prevalent in the early days of the railroad.

Then, to top it all off, Adobe showed off Flash applications running on a cobbled together tablet device running the Android operating system at the Web 2.0 Expo in San Francisco. Here’s a video of the demo:

I am excited about the new Google tablet, not necessarily because I am planning on running out and buying one, but because I have long believed that the tablet form factor could make for an extremely useful device. I am still not 100% convinced that Google will hit a home run with only the second piece of hardware it has ever made, and I have always been skeptical about 1.0 versions of any device (including the iPad). However, I do like that Apple will be getting some competition in this space because competition always speeds the process of improvements and enhancements.

What is your opinion of the tablet market? Are you excited about the possibility of a new Google tablet?

Related: Handicapping the top candidates to build the Verizon-Google tablet.