It's call inFORM. Developed by MIT’s Tangible Media Group, inFORM is what's called a "Dynamic Shape Display that can render 3D content physically" -- in other words, it reads your motion under an array of sensors then transmits that information to a tabletop array of pegs, which then duplicates your motion in real time.
The practical applications of a more compact and sensitive version of this technology are limitless. Right out of the box, MIT is working on the following areas:
"One area we are working on is Geospatial data, such as maps, GIS, terrain models and architectural models. Urban planners and Architects can view 3D designs physically and better understand, share and discuss their designs."
All good, but as soon as I saw this, the first thing I thought of was, "The porn industry is totally going to have this within a year. Or less." Yeah, porn always gets the newest technology first.