I can't tell what type of touchscreen this XO has (capacitive, IR, resistive), but I did find some background info. This wasn't a release prototype. As of last fall, OLPC hadn't yet decided to release a touchscreen equipped laptop. The few prototypes built were intended for developers.
Sugar (the OS running on the XO laptops) needed to be modified so it worked better on a touchscreen. The XO-3 is still in the pipeline and is expected to be available next spring, and since Sugar can also run on other devices it makes sense that it also work better with touchscreens.
But even if this isn't the device they were planning to release, this video still gives you a good idea how it works and what it might look like. And the XO-4 Touch, which was announced just a couple weeks ago, is probably going to look just like this.
I didn't have details at the time, but now I know that the XO-4 is reportedly going to have specs similar to the high end XO-1.75 laptop (details here). OLPC has said that the XO-4 will have 8GB Flash storage and 2 GB RAM, as well as the 7.5" screen, Wifi, SD card, and accelerometer found on the latest gen XO-1.75 laptop.
The XO-4 is also gaining an HDMI port at the expense of its third USB port. That HDMI port has no value to me, but I'm sure teachers will be thrilled. They'll be able to plug an XO-4 into a TV or projector without needing a USB to HDMI adapter.