They explain that the system works by converting insulated items (i.e. not your fingers) into capacitors, so that it can read their input interchangeably. The display reads non-capacitive input accurately to within 0.5mm. You won't be drawing any masterpieces on it yet, but the technology is impressive, and certainly headed in the right direction.
Beyond the concern for more fine inputs, Hitachi's technology will be great for people in cold climates. If you live in a cold climate, wear gloves, and own a touchscreen phone, then you know why. There are even special winter gloves on the market so users can still operate their touchscreen devices without exposing their fingers to the numbing cold.
Screen technology has come so far in so little time. Just when we were looking forward to Super AMOLED screens becoming the norm, now we're looking forward to 3D screens on every device. Now all we need is a 3D, Super AMOLED, and capacitive-hybrid screen.
source: DigInfo News (YouTube) via Engadget