Has anyone heard of the IllumiRoom technology being developed for the Xbox by Microsoft Research?

It allows your Xbox to enhance your games by creating a variety of 3D environments, as well as projecting the image of the game onto the wall, and creating effects from recoil and explosions. It looks very promising and immersive, but Microsoft said it will not be ready for the next incarnation of the Xbox. I'll post their demo video below, I'm interested in what other people think of this emerging technology;