I have a latitude XT and have been using Touch since Vista, and it's been vastly improved with windows 7 to the point where I prefer to use my fingers to navigate the OS rather than the track pad.
With momentum scrolling, gestures, jump lists, the larger taskbar, and the new keyboard, touch is really a pleasure to use in Windows 7.
As for a killer app, I don't think we'll ever see one as much as we never saw one single killer app for the mouse. Rather we will see a slow transition where various interfaces are made more useful or natural with touch and pen inputs.
My personal "killer app" is being able to use my tablet anywhere -- standing, walking, lying down, in a cramped space; a touch interface removes the lap requirement from laptops.
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