Just Like a Mouse, Only Better
It's a little something called the human hand:
A camera focused on the user's hand above the keyboard detects when the user touches his forefinger to his thumb. When that "circle" is made, the software maps the gesture to the screen, allowing control in the same way that a mouse can drag and drop, and so forth. Gesture recognition using video frames grabbed in real time has been around since the early 1990's. The interesting thing about this story (to me) is not necessarily the PodTech software, but the fact that now all of the hardware components (built-in cameras, powerful processors) are standard equipment on many computers, and are cheap in any case.
Seems like a step in the right direction.