Microsoft really has a hit on its hands with the XBOX 360 Kinect sensor. The toy essentially puts a powerful tool in the hands of DIYers and students that was previously out of reach. Now, anyone with $150 and some programming know-how can start experimenting with motion tracking, natural user interface methods and more.
One cool example that we ran across today is the Interactive Puppet Prototype.
From the Emily Gobeille and Theo Watson, who created this demo:
The system is doing skeleton tracking on the arm and determining where the shoulder, elbow, and wrist is, using it to control the movement and posture of the giant funky bird!
More info on Kinect projects like this one can be found over at theOF forums (openframeworks.cc/forum/viewtopic.php?p=24948#p24948 ) and GitHub github.com/OpenKinect/libfreenect/ .