One of the main drawbacks of multi-touch displays compared to regular buttons and keyboards is the lack of tangible feedback. There have been various proposals on how to make flat displays with bumps that raise or other methods. Touch screen cell phones sometimes vibrate or simulate a click when the user activates an interface element.
Here is a video of a concept being presented at SIGGRAPH 2009 of how to achieve touch feedback in mid-air for a holographic display:
More information on the research team's website.