A computer capable of reading your mind may sound like science fiction, but it's rapidly becoming reality. Researchers at Microsoft (NASDAQ:MSFT) are now using relatively inexpensive electroencephalography (EEG) caps to measure the brain's electrical activity, then applying sophisticated algorithms to decipher this data into something meaningful enough for a computer to use.

The list of possible applications is almost endless. Sony (NYSE:SNE) has already patented a similar application, hoping to provide an enhanced experience for video gamers. I'm sure that Microsoft is interested in doing likewise, to keep future versions of its Xbox competitive with Sony's PlayStation and future iterations of the Nintendo (OTCBB: NTDOY.PK) Wii.

Longer-term, such a technology might be able to simplify our interactions with computers. For example, it's been suggested that by measuring a person's concentration level, a computer could tell whether its user was confused and needed assistance. (Hopefully not from anything so annoying as Microsoft's notorious animated paper clip.)

The technology might also help a variety of household items. For instance, if pressing a button on a TV remote is too taxing for the average citizens of the future, they could merely think their way across the spectrum of channels. I just hope my two kids never get their hands on such technology -- the fights over what they want to watch would be horrendous.

Mind-reading technology could also complement advances in robotics. Researchers at the University of Washington, right in Microsoft's backyard, have already demonstrated that they can rudimentally control a robot by thought alone. Bill Gates has made no secret of his intention to make his company a major player in robotics, and if his software can be used to make iRobot's (NASDAQ:IRBT) Roomba (or any other robot, for that matter) more flexible and adaptable to its user's needs, the possibilities could be pretty exciting. If nothing else, this new technology should give Microsoft investors some interesting food for thought.

Microsoft is a Motley Fool Inside Value recommendation, Nintendo is a Stock Advisor pick, and iRobot is a Motley Fool Rule Breakers selection. Try any of our Foolish newsletters free for 30 days.

Fool contributor Jack Uldrich has a lot on his mind, and he could use help deciphering it. He owns stock in Microsoft. The Fool has a brainy disclosure policy.