A system for directing light in an interactive display system so as to perform multiple functions. In addition to projecting images on the interactive display system, the system is used to distribute infrared (IR) light onto the display surface, and/or to receive and focus received IR light reflected from a physical object on the display surface. A light separating system separates a multi-waveband light from a source into a predominantly visible light and a predominantly non-visible light, the latter being redirected around visible light modulators and recombined with the modulated visible light for projection onto the display surface by a lensing system. In addition, or in the alternative, the light separating system separates predominantly non-visible light reflected from an object adjacent to the surface, from light produced by the source, directing only the non-visible light received to the light sensor used to image the display surface.