From the Applied Sciences page, "[The adaptive keyboard] is a research prototype developed by Microsoft Hardware to explore how combining display and input capabilities in a keyboard can allow users to be more productive. The keyboard incorporates a large, touch-sensitive display strip at the top. In addition, the display continues underneath the keys, allowing the legends to be modified in real time. This lets you do things like change the character set to a different language or display command icons."
If you are interested in participating, visit the UIST student contest page for rules and important dates. The entry deadline is August 17th!