Following the workshop I got a few questions on what the important papers are that one should read to start on the topic. There are many (e.g. search in google schoolar for tangible interaction, physical interaction, etc and you will see) and there conference dedicated to it (e.g. the tangible and embedded interaction TEI - next week in cambridge).
But if I have to pick two here is my joice:
 Ishii, H. 2008. Tangible bits: beyond pixels. In Proceedings of the 2nd international Conference on Tangible and Embedded interaction (Bonn, Germany, February 18 - 20, 2008). TEI '08. ACM, New York, NY, xv-xxv. DOI= http://doi.acm.org/10.1145/1347390.1347392
 Jacob, R. J., Girouard, A., Hirshfield, L. M., Horn, M. S., Shaer, O., Solovey, E. T., and Zigelbaum, J. 2008. Reality-based interaction: a framework for post-WIMP interfaces. In Proceeding of the Twenty-Sixth Annual SIGCHI Conference on Human Factors in Computing Systems (Florence, Italy, April 05 - 10, 2008). CHI '08. ACM, New York, NY, 201-210. DOI= http://doi.acm.org/10.1145/1357054.1357089