[Phil Lelyveld note: This could be an important piece of the next gen home entertainment experience. It will be interesting to see if MS funds the creation of dual camera linear content for it. Watch the 5 min video.]
Microsoft has strongly hinted that the IllumiRoom augmented reality peripheral projector is linked to the next-generation Xbox 720, in much the same way that Project Natal (Kinect) was eventually linked to the Xbox 360. To celebrate, Microsoft has released a new video that showcases the awesome potential of IllumiRoom, and also a ton of details on how IllumiRoom actually works.