I was looking up, down, and around, while standing in the midst of a beautiful landscape filled with people moving…I heard their footsteps and could tell which direction they were coming from. On the far side of that pastoral setting was a jostling crowd…I could hear it, but not see it.

The unseen crowd was comprised of the thousands of gadget-watchers, of course, who’d converged on Las Vegas for the annual Consumer Electronics Show (CES). The close-at-hand, colorful landscape was a virtual reality environment in a video game, fed into my field of vision by the Z800 3D Visor from eMagin Corp. of Bellevue, WA. That device was one of the more arresting new products in the vast and hype-soaked world of CES.

[Click here for a slideshow of some of the gadgets on display at CES.]

Using organic LEDs, the Visor’s two tiny displays had a wide field of view. And tiny gyros and accelerometers tracked my head movements. According to eMagin’s director of marketing, R. Bruce Ridley, those innovations reduce eyestrain – a key problem in previous attempts to make a marketable head-mounted display. Sales of the device to the military have helped eMagin boost its production volumes, which, in turn, has allowed it to lower prices to a more affordable $900. (Units for movie-watching, without the head tracker, cost less.)

The sponsor of CES, Arlington, VA-based Consumer Electronics Association, estimated that 20,000 new or recently announced products were on display at the show. Some 2,500 exhibitors filled multiple convention halls, covering 16 hectares, with aisles that seemed to go on for kilometers, making it the biggest consumer products trade show in history. About 130,000 people were expected to take in the show – including a whopping 4,000 members of the press.

As always, manufacturers brought their spiffiest new devices – hoping to see them placed in millions of homes before the next round of technology improvements. iRobot showed off its headline-grabbing Scooba robot, which scrubs floors instead of just vacuuming (typically making four passes before it’s satisfied).

Logitech was promoting a computer accessory, the G5 Laser Mouse, with ballast that allows demanding gamers to adjust its weight and balance.

For the security-conscious, Fujitsu offered the PalmSecure, a biometric device that can authenticate one’s identity by recognizing the pattern of veins in a hand.

Meanwhile, Philips displayed a home theater TV screen (the HTS9800W) that is as spare and angular as the monolith in 2001. And Sharp was showing off a proof-of-concept TV with a million-to-one contrast ratio, about a thousand times more contrast than a high-end LCD TV. The visual effect was like a glossy photograph with the black areas deeply black.

In his traditional opening keynote speech on January 4, Bill Gates gave glimpses of Vista, Microsoft’s next-generation PC operating system, which is slated for release late this year. Chairman Bill said Vista will be more virus-proof than previous versions of Windows, and include a number of user-interface improvements. For instance, while the windows in Windows XP look like pieces of variable-sized paper stacked on a two-dimensional surface, Vista will have a third dimension, and also let users lift windows apart and tilt them at an angle, to better follow what’s happening on each one.

Will consumers shell out for the new, more powerful computers that will be required to run Vista efficiently? And, as importantly for all CES exhibitors, will sales of computers and other items leave them with any profits? Given that growth in consumer spending on electronics is looking increasingly anemic, the answers are unclear.

Sean Wargo, the Consumer Electronics Association’s director of industry analysis, told journalists and pundits that the industry has been growing at around 10 percent annually for the last several years. Last year, sales reached $126 billion, in part driven by customers upgrading to more expensive products in the same category, for example, from $50 portable CD players to $299 iPods, and $250 tube-based 27-inch TV sets to $799 27-inch LCD TVs.

But price deflation is now setting in; the price of a flat-panel TV, for instance, is falling by 30 percent a year, Wargo said. Consequently, the overall rate of growth for the industry is expected to slow year, to around 7.5 percent.

But CES vendors can always dream that their own products will succeed like portable music players did last year. A year ago, Wargo says he predicted that sales of music players in 2005 would increase by 100 percent over 2004, when a total of 7.1 million units were sold. In fact, they rose by 224 percent.