In the Chair is being demoed on stage at Demo right now. It's the first thing in the afternoon that got me to stop reading email. That's amazing. I'm getting it for my son.

You'll never practice music the same way again. Wow.

You've seen the Scoblephone. But, what's the Lennphone?

Lenn told me this thing rocks -- he's been raving about this all morning. So have a few other people. And so does Dale Coffing.

OK, OK, it's really named the i-mate JAM Pocket PC, but I'll call it the Lennphone.

Update: Vic Gundotra just wrote me and said he got one too (he's Lenn's boss) and says the phone does, indeed, rock. Hmmm, maybe we should call it the "Vicphone?" Or the "Lenn&Vic&DalePhone?"

Oh, oh, the branding police are gonna come after me for sure!

Right before lunch we saw Teleo.

This is a potential Skype killer.

Why? It adds a toolbar into IE and Outlook. It turns every phone number into a clickable call -- if you were using it, for instance, you could call my cell phone (which is listed on my blog on the right side) just by clicking. Yes, you can call from your computer directly to my cell phone. This is very cool. Is SIP-based and goes through firewalls (Skype doesn't work at many corporations). It's the only SIP-based one that goes through firewalls.

Cons? Windows only and only integrates into IE. Hey, is that a con? :-)

Forbes: Diary of a Demo.

Congrats to my book co-author, Shel Israel, for getting a nice writeup!

This article introduces you to a team who is demonstrating a new product at Demo tomorrow. Part III is about Shel.

Oh, and cool, this is a .NET application. In fact, this year's Demo has a TON more .NET applications than last year.

One of the things that got me to stop looking at Jason's screen was a demo by MDA. These are the guys who built the Space Shuttle's arm. They showed off a 3D camera. OK, no big deal so far. Then the demo'er on the stage faked a shooting (there were three guys on stage and one of the three guys "shot" another guy on stage). The other demoer took what appeared to be video of the scene of the murder with this 3D camera gadget. So far, real boring stuff. Although the pratfall was pretty cool.

But then they switched the Demo screens to a computer screen. On the screen was a 3D model of the scene. It could be spun around so virtually you can walk around the scene. Freaking amazing.

Even better. Then they showed how they could measure the length of the victim. In virtual space. I can't do this demo justice.

They showed how miners can use it to make virtual models of underground mines so that geologists up on the surface can plan out their next moves.

If a camera manufacturer could productize this it'd be massively cool. Imagine making 3D photographs of your family that you could walk into on your computer screen.

See, I was looking for small things. This is a big thing. Obvious to everyone on the audience that it was cool.

Jason Calacanis is sitting right in front of me. How do I know that a company is a giving a great demo? When they get me to start paying attention to them and not to what Jason is doing on screen.

Jason is blogging Demo. And he has a very cool HDTV camcorder in the front row.

There's a BUNCH of bloggers here. If you're blogging Demo, leave your URL here.

Early leaders in the race to be the best "small things at Demo."

Motorola rocked the house with a demo of iRadio.

Why is this a small idea? Hey, listen to music where you want, when you want. On your cell phone. On your car stereo. On your music player. On your computer.

Serious Magic's Vlog It caught my eye. Cool video blogging and presentation application. Hey, maybe there's a future in doing a video blog? Wakeup Lenn: who knew our video blog was a year ahead of Demo? Heh!

Ahh, the smell of Demos are in the air.

I'm not going to cover this thing in any detail. Lots of other people will do that. Instead, I'm going to try to listen and pick out three companies that I think will have the best chance to be the next big thing.

In other words, I'm looking for a small idea. Something that everyone else will say "that's stupid."

I feel for these companies, though. Some have spent six weeks preparing for their six minutes on stage. For those who have never been to a Demo, Chris Shipley invites a ton of companies down here to Phoenix. Most of which are startups that you've never heard of before. She also invites a bunch of other people here (Walt Mossberg was seen roaming about here and I had a nice conversation with Steven Levy last night). The companies get six minutes on stage to convince everyone they are worthy.

So, who has the next small idea?

Drew Marsh: Longhorn FUD spreading like wildfire.

Drew, this isn't FUD and it isn't new. Last year we announced these things in public.

Avalon and Indigo are now separate from Longhorn. But, they both will work on Longhorn, as well as Windows XP, and Windows Server 2003.

But, Drew cuts to the chase:

"I mean there were only three pillars that really made Longhorn anything other than a service pack and if all three of those are now (supposedly) cut what's going to be new in the next OS? It just doesn't make sense.

Drew, you're right. It doesn't make any sense if you look at it that way. If you assumed that all there was to Longhorn was the developer APIs that we showed off in 2003. Hint: we didn't show you everything at the PDC in 2003.

So, what's Longhorn today? Sorry, I'm keeping quiet until we're ready to give out bits to let you see for yourself. If you search Google or MSN news sites you'll see some hints (our execs have been starting to talk about Longhorn again) but I'm not going to comment until beta 1 is ready.

That all said, why did Avalon get removed from Longhorn? Easy: when I showed it to developers they all said "oh, that's cool, I wanna use it, but I can't until we upgrade all of our computers." See, developer after developer told us that cross-platform compability (in this case, Windows XP, Windows Server 2003, and Longhorn) is far more important than a few whizbang cool toys.

Also, when I talk with "regular people" (you know, the people who don't write code, but use computers) they kept telling me "solve your security/phishing/malware/spyware problems." Or, "why do we need 3D graphics? Why can't you make the performance/reliability/usability of Windows better?"

In fact, go back a few weeks where I asked my readers for what things they wanted Microsoft to do. Overwhelmingly you all said to focus on the basics and nail those. I don't remember anyone asking for new 3D graphics.

So, Longhorn of tomorrow doesn't look like Longhorn of PDC 03. I'm sorry about that, but I totally agree with the changes that were made. Avalon and Indigo are much more important for developers now that they're on XP and Server 2003 too.

Hope that helps a bit. If it doesn't, leave a message here and I'll get someone to help out.