Just watched the whole Douglas Engelbart demo from 1968. Somehow I'd only heard of this as the first demo of the computer mouse, and only seen a brief clip on youtube. All three 30-minute reels of the film are available online, and well worth a watch in full.

The mouse is the least of it, the demo includes an outlining text editor, model-view-controller, hypertext, wiki, domain specific programming languages, a precurser to email, bug tracking, version control(?), a chorded keyboard. (Ok, that last one didn't really take off.) Probably a dozen other things I've forgotten. All in a single interface, and all before I was born.

Just like any tech demo, there are fumbles and mistakes, which is reassuring to anyone who has tried to give a tech demo.

There's also the awesome crazy hack shown here. They could only afford these tiny, round CRTs, so they pointed a television camera at it, and the camera image was piped to their television console. (So add KVM switch to the list of firsts!) The demo was done in San Fransisco, with the computer system remote in Palo Alto, so in this image you see the text on the CRT overlaid with the video from the camera.

Engelbart points out that the delay this added to the system acts as a short-term memory that filtered out flicker in the original display (and made the mouse have a mouse trail). To me it gives the whole demo a unique quality, as if it were underwater.

Despite the piping around of audio and video signals, and the multiuser system, the glaring thing missing from the demo that we have these days is networking. Although there is this amusing bit at the end where they compile a regular expression and then apply it, in order to search for documents containing certain terms, and end up with a hyperlinked list of 10 results, ordered by relevance. Yes, think Google.

You forgot the webcam -- and your final image actually shows it. This is not the film director deciding to do an overlay or so, they mention that they have the computer do the routing. Sure, they probably don't digitize the video stream, instead transmitting it through analogue channels instead, but it's still a camera builtin to the monitor, the feed of which is being displayed on another monitor.
Comment by Wouter