Amanda Ghassaei‘s Multitouch Music Controller:

This project is an Arduino-powered infrared touchscreen / coffee-table interface that I’ve been using to control various music and graphics applications on my computer. This is an old project that I’ve recently had time to go back and document/fix up; this project is a little more special to me than most because it was my first Arduino/electronics project, and while I was doing research for it I ended up on Instructables for the very first time. I’ve been using this controller primarily to drive music and graphics applications running in MaxMSP.

The touchscreen uses infrared (IR) sensing to detect fingers and other objects on the screen. An IR laser at each corner shines IR light across the surface of the screen. When a finger or other object touches the surface, it causes the IR light to scatter in many directions. Some of this light is directed down into the screen, towards an array of 64 IR sensors. By scanning through the sensors, you can determine the x and y position of the touch event(s) and use this to control a variety of apps.

Check out the full documentation on instructables.com