Just in case that I'm not the only one who really hasn't the slightest idea about game consoles: You can find a video showing some Bruce Lee wannabe in front of his eye-toy on
youtube.
The impression that I got is that eye-toy doesn't really recognize anything, but only reacts to motion. As the background is static the only thing moving is the player. It's therefore quite trivial to detect his motions by just comparing the last few frames recorded by the camera (not per pixel - you get the idea). The only game that might be a tad more sophisticated is antigrav, although I guess that the basic idea remains the same.
While such an approach might be fine for all kinds of "visual karaoke" games, it's certainly not sufficient for a desktop system. After all I'm probably not the only one who doesn't want to do 2 kick-flips just to close a window

. What I actually had in mind is a system as it might be used by divers or soldiers during urban warfare. In both situations you can't talk and thus have to try to express yourself by small gestures of your hands.
I could for example imagine to just point to a window to activate it. As long as I keep my hand pointing at it the window follows my finger. If I want to close a window I activate it by pointing to it and then just snap with my fingers (that should look really cool..).
As you can guess, such a system is much harder to implement as it requires the computer to really recognize what's going on. Just detecting motions and reacting to them in a mechanical way isn't enought. I would also expect, that such a system can only be implemented using hardware accelertion, as it would otherwise eat up too half of the CPU time..
These guys just took an radio emitter and
triangulated it using three different receivers. This merely replaces a mouse and doesn't allow any real guestures. I also don't see how it's any more comfortable to stand in front of the screen waving your mouse through the air: Call me old fashioned, but I like my beer cold, my TV loud and my mouse on its pad
regards,
gaf