Controller-free kids? Welcome to Xbox 360's 'Project Natal'

CC and a little boy rock out on the Xbox 360's "Project Natal" at a sneak peek in Venice.

There was lots of arm-waving and hip-shaking last week at a sneak peek event for Xbox 360's "Project Natal" at The G2 Gallery in Venice.

And Elvis was nowhere in the building.

With Xbox's newest gaming creation -- coming Holiday 2010 -- "You are the controller," as they say. That's right. No plastic gaming controllers that can be lost or flung across the room in a heated moment of video-gaming madness.

Nope. Just a sensor that zeroes in on your body and replicates your movements on screen. It can even recognize your face. (HAL, is that you?)

I have to say, it was pretty awesome watching kids at the event get into the game, leaping from one spot to the next, kicking and throwing virtual balls.

The project is still in its development phase, however, so there were definitely some kinks.

First off, representatives told me CC probably wouldn't get the chance to play because she was too small. Talk about disappointed. I didn't give up, though, asking if we could just give it a shot and see.

Turns out the sensor did recognize her, despite her being just over 3 feet tall. They assured me kids of any size would be able to play once Natal is in stores. Let's hope, or there might be a lot of disappointed munchkins out there, watching in envy as Mommy and Daddy rock out on screen.

There were also some on-screen avatars that looked as if they were suffering from restless leg syndrome. They were bending in ways that almost made me flinch. Another minor point that Microsoft is on top of, according to reps.

The technology behind this device is really remarkable, especially because it gets kids up and moving. That's one of the biggest complaints about video games -- that kids spend hours on the couch without any physical activity.

From what I saw last week, this could definitely be a calorie burner.

Now, if it could just do my laundry, too.

(I have to mention the amazing balloon artist who was at the event entertaining the little ones. His creations were incredible (photo above right), so if you're looking for birthday party entertainment, visit Pretend, Inc.)

*Disclosure: This invitation-only event provided attendees with a complimentary FlipCam.