Most people examine fabric swaths for texture and color; Maggie Orth checks them for voltage readings. Orth is the CEO of Cambridge, MA-based International Fashion Machines, a developer of electronic textiles in which fabrics act as electrical conduits, enabling data transfers within clothing.

A handful of small companies, including Orth's, are racing to commercialize the concept, born in mid-1990s at the Massachusetts Institute of Technology's Media Lab wearable computer group. And big-name manufacturers such as Dupont and defense contractor Lockheed Martin are starting to take notice. Says James Saultz, a business development manager at Lockheed Martin's Advanced Technology Labs, "There's always been a desire to put electronics into soldiers' uniforms."

While manufacturers of so-called e-textiles set their sights first on military applications, they are also developing materials for medical use and even teen fashion. But manufacturers still need to prove both the viability and practicality of their products before they can expect the big government contracts.

That's why, for example, Orth is trying to catch the interest of the military with fabrics that change color when conductive fibers stitched into the cloth heat and cool the material's thermochromatic inks. "The army wants fully addressable, interactive camouflage," she says, "so that when you're standing in front of bricks, your clothing looks like bricks. When you're in grass, you look like grass. Accomplishing that would be like a space program for e-textiles."

Sensatex is another e-textile startup that is creating shirts that can be used to monitor soldier location and status in the battlefield, according to Ari Reubin, a senior vice president of business development for the company. One of the biggest problems for medics is locating a soldier's wound and determining his vital signs amidst battlefield chaos. A uniform that monitors a soldier's vital signs can wirelessly relay the exact location of the wound, saving a lot of valuable time--and lives. In the fourth quarter of this year, Sensatex will begin selling to hospitals a shirt designed for premature babies that can monitor vital signs and heat or cool the infant by up to .03 degrees Celsius. Sensatex's future plans include a "SmartShirt" that monitors heart rate, EKG, and torso penetration. Others like Polartec have created jackets that heat up, using electrical conduits in the jacket itself. And Burton--the purveyor of must-have snowboard fashions--will introduce a jacket in October that contains a minidisc player sewn into the fabric with player controls woven onto the arm.