Microsoft's IllumiRoom takes gaming visuals outside the box and onto the living room. Basically projection mapping for your living room, based on a 3D scan using Kinect, Microsoft Research's IllumiRoom lets you show either all of a game's environment, or only certain parts, projected on your living room walls.
Hacking with gestures in a 3D space is now possible, with Kinectasploit (a mashup of Metasploit and Kinect with OpenNi, in a Blender-made environment). (via Slashdot)
Ever since open source drivers were written for the Microsoft Kinect (previously), we've seen countless innovative uses of the hardware from puppet shows to air guitar to realtime 3d data capture. The most profound and far reaching hack so far, however, is no doubt the ability to import giant 3d statues into minecraft. More info on the project can be found here. (via reddit)