The most likely reason Tablet PCs (as envisioned by Microsoft) didn't take off was/is the lack of a "killer application". Well, that's my opinion and I'm sticking to it. There just was not a compelling reason to go out and buy one.
But Microsoft is a big company and at times very secretive about their researches, so we don't get to see what their developers and planners are thinking about and working on much of the time. Now up pops InkSeine, what looks like the basis of the killer app for the Tablet. It is not hard to see Microsoft's release/non-release of this as testing the waters to see if this generates any buzz at all among developers. If it does, I'll bet the little "research project" blossoms into a product development project faster than you can say "Steve Ballmer talks too loudly".
Be sure to follow the link to the features list. I found reading that really whet my appetite for a tablet. That has happened before, but this time things look more or less lined up to give us a really forceful argument for buying one. I hope they continue to develop it and bring it out as an add-on for Vista or as a stand-alone Tablet PC version.