I think that the Project Natal demonstrations show some pretty cool technology. I think that, if this actually ships, this will easily give the Xbox 360 an easy way into the casual gaming market, and could be a serious competitor to the Nintendo Wii.
Project Natal, use a camera/microphone device to allow you to interact with the Xbox interface. Facial and voice recognition allows a deeper interaction than the Nintendo Wii implements.
Below, I have embedded several videos of Project Natal. I hope that when it actually ships it does just half as much as is shown in these videos.
[via Google Blogoscoped & Engadget]