According to the project main page it is divided into two parts:
-Touchless Demo is an open source application that anyone with a webcam can use to experience multi-touch, no geekiness required. There are 4 fun demos: Snake - where you control a snake with a marker, Defender - up to 4 player version of a pong-like game, Map - where you can rotate, zoom, and move a map using 2 markers, and Draw - the marker is used to guess what.... draw!
-Touchless SDK is an open source SDK that enables developers to create multi-touch based applications using a webcam for input, geekiness recommended.
they provide a nice video which demonstrate all the features off the project.
the first thing you might need after launching the demo is to set webcam and ensure that it is working then you will need to create markers, you should use a distinguished one so the camera can easily recognize and you can create more than marker , actually you will need more than one to play the demo's included.
the demo that I liked most is called the image demo were you can rotate , move and resize a photo with two markers like pictures in iphone or Microsoft surface.
and here is a screenshot where I was able to control a picture with two screwdrivers :D.
the second demo is a small snake game.
there is also another game that you can play with three other players
the last one is a paint demo where you can draw with markers.nice drawing,isn't it ? :).
Finally I hope you enjoy Multi touch with Touchless :D.