As computing technologies expand and as more digital products become part of our lives so goes new design opportunities. Interaction design is another and growing branch of the big tree of "Design".
Interaction design is the process of defining the complex dialogues that occur between people and interactive devices —from household applicances, computers mobile communications devices to automobiles.
Business Week Article
A Book on the Subject
Interview: Bill Moggridge
Below is an example of BMW's iDrive interactive system. The dials and switches on the center console are used to control many of the functions of the vehicle including: audio, navigation and ventilation systems just to name a few.
Blog: Interaction design What is It?