You've no doubt heard (or even seen) how Kinect works, by projecting thousands of points of infrared light around a room. Now see what it can do once it takes all that information in.
Okreylos has posted this handy little video on YouTube - produced by hacking his Kinect, of course - showing how Microsoft's motion-sensing camera is able to generate a crude 3D model of its surroundings. It's of course missing a lot of stuff (basically anything the Kinect can't directly see), but there's still great potential here, especially for budding indie developers who want to make a game based...on their house.
That or make their own "help me Kinect, you're my only hope" messages.
His second clip, below, shows how Kinect is able to accurately measure the size of any objects it can capture on-screen. With all these 3D capabilities, it's a little sad the device's launch games could do nothing more than get you waving your arms/booty around, no?