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Microsoft is showing off a prototype tablet running Windows Embedded Compact 7 at Computex this week… and it’s looks a bit like what you would get if you took a Zune HD or Windows Phone 7 device and expanded it to fit a 10 inch screen. The good news is, it looks awesome, the web browser and video player seem pretty slick, and the user interface is features Windows Phone 7-like icons and social networking integration.

The bad news is this thing will never make it to market. Microsoft mocked up a user interface built on Silverlight that rests on top of Windows Embedded Compact 7. It will be up to OEMs to develop their own custom user interfaces for tablets, netbooks, or other devices.

That said, the demo does show how the new version of Windows CE supports multitouch and hardware video acceleration.

You can find more photos at Engadget, and check out a hands-on video below.