There's one reason the Nintendo Wii has been the most popular video game console these past few years: motion controls. The Wii remote makes video games more appealing for folks who didn't spend a huge chunk of their childhoods or teenage years gripping 21-button controllers.
The Xbox 360 is the device of choice for hardcore gamers, but it hasn't been as successful with those video game newbies. Thus, Microsoft decided to try to one up Nintendo: What if you could control games by moving your whole body, not just the controller in your hand?
Natal is primarily a 3D camera technology; it was announced just under a year ago. In one demonstration, a kid performs karate moves and sees them matched by his avatar on screen. In another, a woman serves a volleyball by swinging her arms. In still another, a virtual boy recognizes and responds to a player's body language. Have a look at the (mostly simulated) demo video below.