The PlayStation Eye with a color changing LED wand was shown with the wand morphing into a tennis racket and stop sign. Other items like a flashlight and dart gun were demonstrated in a virtual room. Sony plans on launching the wand in spring 2010.
The controller has 1:1 motion tracking and buttons to replicate items like a gun. It’s possible to use two wands at once. Another demo tested writing to demonstrate precision. A RTS demo and combat fighting with a skeleton dummy was shown. One wand acted as a shield, the other was for the sword. It looks pretty precise!