Wow, Microsoft just dropped even further down in my estimations.
This is not a new idea, it's been possible to use an iPhone as a controller for PC/Mac for ages. There's already an app to use an iphone/ipod as a keypad and touch pad. The thing is, Microsoft were the ones blocking this, with their precious wireless controller technology pushing peripheral prices up, and things like virtual controllers out of the realm of possibility. Every 360 controller manufacturer has to pay a fee to use their controller technology, that's why 360 peripherals cost more than on other consoles. That's why my PS3 has a kick-ass steering wheel, mouse and nunchuck controller, and a fricken skateboard controller, while my 360 has nout.
But ohh, genius Microsoft patent the idea as if it's their own, so they can impliment it themselves. It's not even innovation, it's a mindless app idea that adds absolutely nothing. The touch screen isn't being used for anything but virtual controls, non-tactile shitty controls in other words. Why don't they send a video feed, make it possible to use the 360 in realtime - just like what is already possible with PC's.
I thought M$ were done with this sort of bullshit - they have basically stolen the whole idea from indi developers. I was doing this on my NDS about 6 years ago, better, with more features (playing BF2142 actually), for M$ to apply for a patent is a fucking joke.