This magical pen from Microsoft Research can dynamically reconfigure itself to be any sort of digital device that you need it to be, by sensing how you hold it. If you hold it like a pen, it works like a pen. If you hold it like an airbrush, it works like an airbrush. And if you hold it like a saxophone, well, you get the idea.
While it's true that the number of people who need a digital stylus that can also be a digital pencil, digital airbrush, digital flute, and digital saxophone is probably quite limited, that doesn't mean that having a self-reconfiguring device isn't a neat idea. Microsoft's prototype is sheathed in a capacitive multi-touch surface, with a motion and orientation sensor kludged onto the back. It pays attention to how the device is being held and moved, and changes to one of eight different preset functionalities on the fly.
If you aren't a flutist, I'm sure that you can tell the stylus to be anything you want it to be based on how you hold it. For example, that "stamp" grip is what I generally use for stabbing people, and I'd want my pen to be able to be reconfigured to reflect that, but I'm sure that's easy to do: all I'd need to do is start stabbing someone, inform the pen that someone is being stabbed, and then the pen could check my grip and remember what it means. Then I could set up custom functionality so that from then on, when I switch to my "stabbing" grip the computer will start erasing sensitive files and posting alibis on Facebook.
So, while in of itself this stylus may not be the most useful of gadgets, I feel like there may be some potential here for developing sensors that enable our electronics to better adapt to different purposes without having to be given explicit instructions every time.