I like this work, using the xbox kinect to navigate in a 3d environment:

In this video Carl demonstrates how we are using the Xbox Kinect to navigate around the 3D CAVE at CASALA.

However, THIS is even cooler:

For our archeology department at the university of Groningen, we made this 3D stereo reconstruction of an excavation in Crustumerium, an Iron Age settlement in Italy (800-450 BC).

It is so cool to see that Universities and artist are using the cheap Kinect to make interaction between the Real and the Virtual world possible. BTW: Groningen FTW! :-)