Microsoft demoed Project Natal a controller free interface supported by a camera. A video with voice recognition, facial recognition, and object scanning (a skateboard brought into a game) was shown. Other features like video conferencing and a martial arts game with a kid punching at the screen were shown.
A Project Natal demo showed a human style Breakout game and a paint game where you shout colors and throw paint at the screen.
Project Natal will be compatible with all current and future Xbox 360 models.