By Prince McLean

Published: 05:00 PM EST (02:00 PM PST)

In a conversation with Fox Business News, business luminaries Bill Gates and Warren Buffett praised Apple's performance while talking about tablet technologies and presented an overall strong outlook for the American economy.

Microsoft just canceled the prospect of own Courier high-end tablet concept that company observers had hoped to see reach the market later this year. Additionally, its Slate PC partnership with HP, aimed at delivering a tablet-sized device running Windows 7, has been sidelined by HP's high profile purchase of Palm. Analysts expect HP to use Palm's webOS instead of Microsoft's desktop operating system in its future mobile products.

However, Gates said in the interview that "Microsoft has a lot of different tablet projects that we're pursuing," perhaps alluding to previous Tablet PC and UMPC devices, as well as forthcoming Windows 7 systems from other vendors, such as Dell's Streak tablet.

Thinking outside the pen

Gates also emphasized the stylus as being critical to Microsoft's plans. "We think that work with the pen that Microsoft pioneered will become a mainstream for students. It can give you a device that you can not only read, but also create documents at the same time."

While Microsoft developed some rudimentary support for Pen Computing in Windows in the early 90s, mainstream stylus-based computing devices had arrived much earlier, dating back to the truly pioneering GRiDPad and Apple's sophisticated but slow selling Newton MessagePad, which introduced the concept to broad audiences.

Gates has long advocated stylus-based mobile devices, announcing in 2001 that "within five years [the stylus-drive Tablet PC] will be the most popular form of PC sold in America," a promise that simply failed to materialize. In contrast, while Apple has continued to investigate the merits of pen based computing and has patented related concepts, its chief executive Steve Jobs has downplayed the roll of pen-based devices since the iPhone was unveiled.

"We are all born with the ultimate pointing device: our fingers," Jobs said at the time, "and iPhone uses them to create the most revolutionary user interface since the mouse."

Buffett, Gates on Apple, the US economy

Turning to Apple specifically during a conversation on investing in tech companies, Buffett said, "Steve Jobs has done a terrific job. And there will be companies that excel. And occasionally they will excel because of luck, but usually they excel because of brains."

Gates added, "Yes, I think both in general and in the specific, Apple's done a great job."

Both Buffett and Gates were optimistic about the country's economic future, with Gates noting that "Innovation is still there and it’s very much a global system. We’re way better off and this is going to be a great time for the country."

Buffett added "we have a terrific system. In the end, decade by decade, people live better in this country." On the subject of government regulation, Buffett observed, "well, you never know what they're going to do and we'll -- we've managed to adjust to all kinds of regulations and laws over the years and most of them we think are pretty good. So, that, I'm not sitting around worrying what Washington is going to do in terms of running Berkshire Hathaway."

Regarding the Recovery and Reinvestment Act stimulus, Buffett said “we followed the proper course of action when the world virtually stopped in the fall of 2008. That only, only the United States government could have stepped in to leverage up to offset the deleveraging going up in the rest of the economy so we applied the right medicine basically. We applied massive dosages of it. We couldn't keep doing that without having other consequences, it's the right thing to do then. It’s the right thing to end at some point and ending it is harder than starting it.”

On capitalism and global markets, Gates said, "We still have the best system for letting people take risks, get capital. We are the envy of the world. They are coping some of our good ideas. Unfortunately, our health care system, they are not copying some of our bad ideas.”