Yay, it's great to see my old group Microsoft Applied Sciences in the press! Lots of great display and interaction work being done there. Fantastic mix of software, hardware, and optics people. Congrats!
As it becomes increasingly cost effective to manufacture a more diverse set of computing form factors, exploring new ways of providing input to a computer and sending output to a user will become an essential part of developing new genres of computing products. The time when raw computing horsepower was the key differentiator passed us several years ago, and the rate of device specialization has shot up dramatically. Less computing power is fine, if it is where you need it when you need it in the form you need it. As a result, you likely see the speed at which wild interface technology research moves into to product also accelerate.
Consequently, if you are a young engineering student. There will be a steady stream of good jobs for people who like to write software for new kinds of input/output devices. =o)