Rosie, make no mistake. MSFT needs hardware for NGSCB. As it stands now, that means a TPM on the MB, a chip in the keyboard and monitor. (I think there was also at least one other secure chip requirement for NGSCB)
It's very likely that Siden is still there, alive and well. For NGSCB, authentication, logon etc. will take place in a Longhorn in a trusted environment. The keyboard chip simply encrypts the keystrokes, and then sends it via USB to NGSCB where the actual decryption and authentication take place. The keyboard on it's own does nothing without NGSCB. It can not support any services or do any authentication.
Finread requires that the authentication takes place in the reader/keyboard, nor could Finread be supported with the above kind of keyboard. Wave has the TPM's covered via their relationships with Intels,NSM, INFX, ATML, because Wave's applicatons and utility products will use the TPM's from the above vendors and be compatible with NGSCB computers when they hit the market.
MSFT will need still need the keyboard chips for NGSCB, but they won't need them until they start doing betas.