Microsoft, by the hand of J Allard, the guy in charge of the Entertainment and Devices (Xbox and Zune) Division, has filed for patent protection for a "Magic Wand". What? Oh, it's a Wiimote.
From the application:
The [wand's] architecture can utilize one or more sensor from a collection of sensors to determine an orientation or gesture in connection with the wand, and can further issue an instruction to update a state of an environmental component based upon the orientation.
So it's a motion sensing controller, much like Nintendo's, except in the form of a wand. Also mentioned are possible "biometrics" features, but it's not totally clear what that is supposed to mean.
That Microsoft is working on a motion-sensing controller isn't a surprise—it's that they're interested in this particular kind. Recent rumors point persuasively to the possibility that Microsoft will debut a motion accessory at E3 in June, but they've emphasized Microsoft's acquisition of ZCam, makers of a camera-based controller system that operates in a different manner to that described in this patent.
Crucially, though, this patent was filed in 2007—probably before Microsoft had a coherent plan for a motion-sensing controller, and months before they purchased ZCam. Heading into E3 and assuming that Microsoft is working on a motion controller at all, then, we now have a few healthy possibilities. [Techflash]