Originally Posted by mynameisjim

This is pretty advanced motion sensing technology. The company they bought it from does military research and applications.

Some of the stuff they showed in the demo was a person writing on a piece of paper, then "handing it" to a character in the game. The camera scanned the writing on the paper and the character took the piece of paper. The characters also recognize you by your face, so that could add a huge element to RPG games.

BTW, the actual system is called Project Natal. From what I've seen, it's waaaay ahead of the Wii. Unless it turns out to be super expensive or the demo was faked, this should be a big hit.