In reverse order!

about modeling: I'm afraid there would have to be a lot of tweaking left to do. Mainly because of occlusion, once a marker is occluded, there's no way of finding it again (and still keep track of which marker is which). Most image-based motion capture... thingies use more than one camera to this effect. 3 seems to be the minimum.

superpig, about that grabbing: the article mentions the dude sqeezing the device. detecting a 'grab' motion requires multiple markers to be tracked, and is needlessly complex and unreliable. Better use a trigger. However, distance can be used as a trigger too. Your design sounds great btw. (you might want to track amplitude of the microphone input, kind of "i think i heard something" versus "what the hell was that!!")

plasmadog: TrackIR looks interesting! I'm reading about it, and watching the demos. Groovy.

Thermodynamics: you don't really need to turn around fully, your movements don't have to be in 1:1 scale. It's only another control imput, like a mouse (for marker tracking). And about PC's... they're definitely over PS2 range nowadays, what takes 20% in a PS2 shouldn't take much on a PC. Still a decent amount though, but much less.

ToohrVyk: i couldn't find how to make links clickable :/

you misread the article. The ps2 uses 20% when doing head/object tracking. The per pixel infra-red distance measuring is not done using the eye-toy. That is another device entirly. the eyetoy is a standard usb webcam, nothing special.

That is cool. Now all I need to do is move some furniture and wait. I'm glad I picked up that wooden sword now. This would be a lot of fun in hack and slash games. The only problem is that there's nothing for the sword to connect to(as in hit). Any ideas on how to overcome that?

My first thought is to create a standard fighting dummy with a few but well selected motions to be used by a majority of the games.

This could definitely bring back home light gun games. There could also be a home version of my favorite arcade game(it was a quick draw target game using a light gun and photosensitive targets, I was exceptionally fast and accurate). The game required the gun to be in a holder before it would start so now the camera can do that job.

We could have fighting games in the first person perspective(no really, have you seen tv sizes these days)!

Imagine all the bending you'll have to do to play a Zelda game! How would you play a kibry game though?

heck, you could have lightgun minus the gun. Point with your finger. Boom! (hey, dragonball Z style fights.. thats not too far off! )
I sure wish the aim/shoot genre gets a revival. It was hella fun.

About feedback, well, force feedback! get a lil whirr when you made contact. I doubt they would work with fast motion anyway, so don't expect fighting to come anytime soon. The looking around aspect is what I look forward to right now (after watching the TrackIR videos.... damn, racing looks sweet)

I just realized this could also bring back VR gear(except for all the bumping into furniture). If the game is tracking your movements, it doesn't have to display stuff on a tv at all! The only problem is to figure out an elegant way to move in a greater range than your living room allows.

It's all about amplifying your movements and tricking you into doing stuff.
I read this study years ago that if the VR App turns slowly, you won't notice and you'll turn yourself to keep the picture steady. They did this to keep pepople in a CAVE (VR stuff) from looking at the missing wall. They also amplified the turns, so they could do 180º turns without turning completely.

TrackIR amplifies head motion. I can imagine gaming in the future by just doing dreamy motions of what the virtual character does.