Microsoft did this shit yesterday!! 
Microsoft flailed with their hands yesterday. Fucking Eyetoy stuff.
MS has voice and color recognition and tracks subtle gestures, everyone who has actually used it (developers) says it works very well, according to everything i've read
also, i guarantee there will be games that use it in tandem with the existing 360 controllers
don't dismiss it just yet
i haven't gotten to the saggle yet, but i'll give it credit if it looks neat