The following sentence means "seeing all the different foreign people was interesting."
This, according to my Japanese friends is incorrect:
... and this is correct:
To me, the difference is so subtle that I can't really get a feel for how the presence of の really changes it.
Can someone provide an explanation that clarifies what makes の important in this situation?
Update: I'm actually still confused by this. Couldn't the first example mean "Looking at the various foreigners was interesting", and the second example mean "That I was looking at the various foreigners was interesting"?