How does the iPhone "multi-touch" interface work? Who developed the "multi-touch" interface originally?

Apple boasts that "multi-touch" interface is:

The most revolutionary user interface since the mouse. It's an entirely new interface based on a large multi-touch display and innovative new software that lets you control everything using only your fingers. So you can glide through albums with Cover Flow, flip through photos and email them with a touch, or zoom in and out on a section of a web page -- all by simply using iPhone's multi-touch display.

In basic terms, the iPhone screen acts as a far more advanced version of the "Scrolling Trackpad" first introduced on January 31, 2005 in the PowerBook G4 series. Touching the display with one or more fingers triggers different responses based on context.

In a hands-on test of the iPhone in MacWorld, Jason Snell reported that:

One of the joys of using the iPhone is understanding that it's not just a press-and-hold interface, but one that can be controlled by numerous gestures, most of them fairly intuitive. When you're in a long list (such as a list of iTunes artists), flicking your finger on the screen makes the list scroll rapidly. To unlock the iPhone and start using it, you have to slide your finger across its face, a movement that made me feel as if I was almost unzipping the phone. Zooming in on an image or a web page by poking at the area you'd like to enlarge with two fingers and then spreading them apart feels quite natural, too.

Although the iPhone may be one of the first, if not the first, mainstream devices to use a "multi-touch" interface, the concept has been around for many years.

In an excellent column on AskTog that should be read in its entirety, Bruce Tognazzini, who founded the Apple Human Interface Group and worked for the company from 1978 to 1992, says:

While the iPhone as a whole may be revolutionary, the individual elements forming the interface are not so new. Bill Buxton was pushing multi-hand input back in the 1980s when the world was just waking up to the mouse, already 20 years old at the time. Several researchers were experimenting with gestural interfaces in 1990s, myself included. I was reminded of this only minutes after Steve's speech when my partner, Jakob Nielsen, called me to say, "Jobs just announced your pinch interface!"

I didn't try to patent the object-shrink-pinch process in 1992 when I hit upon it -- Sun didn't get "patent madness" until more than a year after I had showed it around -- so I can’t claim that I was even the first to come up with it because we never researched prior art.

Bill Buxton has assembled an excellent Multitouch Chronology. It reveals that Myron Krueger was using pinching as a gesture by 1982, although I haven't discovered what meaning he ascribed to it.

Regardless, it is great to see such a clever idea finally make it to the mainstream.