I think reason people find it hard to see it working for applications other than image manipulation and DTP are because the well defined constructs of how a mouse and window work are now embedded in our culture.
On the whole I can agree with that on principle, but I'm usually pretty good at exploring potential. AFAICS the input options will primarily be the same as keyboard and mouse, only less tactile - you can press 'buttons' and move items. Controlling a bounding box with two fingers is definitely something new, but it's gameplay merits are limited in most genres. You could use it as a sort of 2D-motion control, tracing pathways. Well, in drawing control DS already shows what's possible. The other unique input it offers is area (I think. Or does it only register centre of contact?), so you could add a second analogue input to position of a contact. You could draw hard or softly, and affect the response that way. Perhaps draw a pathway gently and your FPS squad sneak, or draw it heavily and they rush?
On the whole though, I can't clearly see advantages to mainstream genres*. It'd be great for
Puzzles
Bowling
Cards
Strategies
and other simpler games.
I can't see it being a controller of choice for
FPS
Racers
Footy
Sports (though tactical sports games would work)
I think if the game moves towards tactical rather than arcade, it'll work well. eg. In a flight sim you wouldn't fly the plane directly. The best solutions for that would be sticks or motion control I think. But you could use the interface to select waypoints, targets, issue instructions to wingmen, etc. Likewise in American football it'd be great, selecting players and drawing paths, in a tactical game. Or in Soccer, managing your team as they play. For direct character control, more physical controls would probably be the people's choice, or looking forwards there'll be better interfaces like motion controls or image-recognition, that'll work more comfortably with the normal 'sat-on-couch-watching-TV' comfort position. The next Elder Scrolls game might work well on the PlayTable, drawing sword-swipes and easily managing inventory, but I think a Wii-type interface would be a better experience.
* Caveat : in 5 years time perhaps Wii will have redefined what's mainstream, and FPS, racers and sports are viewed as tidly little niches!
