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The technology behind the system is called Electromyography, or EMG. Electrodes on the arms, legs, head or chest can be used to track muscle movements keyed to specific actions or commands sent to a computer, video game system, vehicle or other device to provide a "hands-free" control scheme.
Check out the demonstration video below for some pretty cool visual illustrations of how EMG applied to consumer electronics could be useful, especially in situations where your hands are already busy or occupied with other objects. One interesting application shown in the clip is an "air guitar" version of Guitar Hero.
Let us know what you think -- what other applications could you think of where muscle-based control systems might come in handy?