legoburner writes, "Takeo Igarashi from the University of Tokyo has a very impressive java applet/program, called Teddy, which he describes as 'A Sketching Interface for 3D Freeform Design', and basically allows you to sketch in simple 2D and have it automatically converted to full 3D. The tool is certainly very impressive and there is a demonstration video available. The end product looks like a hand-drawn object instead of the usual clinical, perfect 3D objects that are designed using standard rendering tools." This impressive technology was presented at SigGraph 1999 (PDF); a commercial product based on it is available in Japan.
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