Microsofts Research group unveiled this technology at the Samsung CES keynote. It apparently relies on Kinect to scan your room and then uses a projector to overlay your room with content from whatever you're viewing, using the initial Kinect scan to make sure that everything looks even on top of your furniture and what not.

Honestly I thought Nintendo would do this a few years ago as I remember some blog posts pointing out that they had investments in touch projection and hologram technology. I didn't see it as being this good though (just a floor projection to add on to the feel of playing a motion controlled Wii game).

This seems like it would be a tad amazing with a glasses-free 3D tv, I get the feeling that the next XBox will be one hell of a platform to develop for.

(Source: Engadget)