Deception and Magic in Collaborative Interaction (CHI 2010)
by Joe Marshall, Steve Benford and Tony Pridmore.
I presented this paper (PDF) at CHI 2010, which is basically a shorter version of the work on the Cup Game and use of magic.
During the presentation, I demonstrated misdirection by creating a situation where I put a large pink soft toy elephant on top of my head, yet no one in the room spotted the elephant, which worked like a charm.
Anyone interested in a very much more in depth version of the work in the paper (and more) might be interested in a look at my thesis, which covered this experiment, and also two other performance situations in which deception occurred. There is also a short video on that page. Oh and there is also some more stuff in the magic theme on this site.