Check out this great DIY showing you how to make a Halloween Pumpkin with a capacitive touch sensor to control the glow of the LEDs. Watch video for a demo!
Capacitive proximity sensors work because people are mostly water, and water is a very polar molecule, and is easily turned to align with any applied electric field. In fact, water has a “permittivity” (dielectric constant) that is about 80 times better than air! When a given voltage is applied between the two plates of any capacitor, an electric field is created between the plates. In the region where there’s a dielectric, the electric field is actually smaller than it is in air (for water, just 1/80th of the field strength), so your first instinct might be to think that the capacitance decreases as well. However, because the applied voltage must manifest as a product of electric field and distance, the electric field strength in the non-dielectric regions actually goes up substantially. Overall, the energy stored in the electric field per unit volume of space has to do with the square of electric field strength, so all in all, the stored energy and capacitance both increase when a dielectric is inserted.