This example does two-three things, the first group simply converts touches to active objects called "fingers" that remain on screen the same way as your fingers do, this makes everything that has to do with multi-touch much easier.
Then the second group utilizes the advanced direction object to smoothly rotate and scale appropriately, when you have exactly 2 fingers touching the screen.
To test it in MMF using your mouse pointer, hold down the "ctrl" button.