Microsoft doesn't just want to bring gesture recognition to the Xbox with Project Natal. It also wants the technology in Windows, according to a very good source--Microsoft Chairman Bill Gates.
Speaking about all of the technology Microsoft has cooking in its labs, Gates said: "I'd say a cool example of that, that you'll see... in a little over a year, is this (depth) camera thing." Gates said it was not just for games, "but for media consumption as a whole, and even if they connect it up to Windows PCs for interacting in terms of meetings, and collaboration, and communication."

Gates said it is an example where the project started in Microsoft research but is now being commercialized by both the Xbox and Windows units. "Both the Xbox guys and the Windows guys latched onto that and now even since they latched onto it the idea of how it can be used in the office is getting much more concrete, and is pretty exciting."

Using your body to control devices makes a lot of sense, Gates said. "I think the value is as great for if you're in the home, as you want to manage your movies, music, home system type stuff, it's very cool there," he said. "And I think there's incredible value as we use that in the office connected to a Windows PC. So Microsoft research and the product groups have a lot going on there, because you can use the cost reduction that will take place over the years to say, why shouldn't that be in most office environments."

Gates actually dropped the first hint of Natal during his joint appearance with Steve Jobs at the D: All Things Digital conference in 2007

"Imagine a game machine where you're just going to pick up the bat and swing it, or the tennis racket and swing it," Gates said.

Moderators Walt Mossberg and Kara Swisher mocked Gates, saying such a technology already exists and it's called the Wii. But Gates disagreed. "No, that's not it. You can't pick up your tennis racket."

He later added, "You can't sit there with your friends and do those natural things," he said. "That's a 3D positional device. This is video recognition. This is a camera seeing what's going on."

Source: www.cnet.com

Sounds very interesting when you think about all the different applications this could be used for. Just imagine controlling your computer like in Minority Report where you move your hands. You could control several thinks at the same time and work with more than 1 monitor and push things around. Kinda like in Iron Man :D
Or all the educational applications this could have. Martial Arts instruction in front of the TV which can even tell you if you are doing it right!
To me this sounds like science fiction and I think I can't believe it until I have it at home to try myself :D

So far, Chris