Microsoft's Project Natal and NPCs

http://www.1up.com/do/blogEntry?bId=8992190&publicUserId=5725436

http://www.xbox.com/en-US/live/projectnatal/

http://www.youtube.com/watch?v=CPIbGnBQcJY&feature=fvst
Peter Molyneaux gives us a look at Milo, which uses Project Natal for amazing interaction with an on-screen character.