Seems like Apple is not giving up on alternative control methods: They have just updated their March Wiimote-like controller patent, so that means they may still working on it. Or maybe not.
A remote wand for controlling the operations of a media system is provided. The wand may be operative to control the movement of a cursor displayed on screen by the position and orientation at which the wand is held. As the user moves the wand, the on-screen cursor may move. The user may use the wand to control a plurality of operations and applications that may be available from the media system, including for example zoom operations, a keyboard application, an image application, an illustration application, and a media application.
I wish they fixed Apple TV instead, so it could play any media, and not only iTunes-branded stuff. Actually, if I were Apple, I will forget about wands and license Microsoft Natal to integrate it in all their computers, especially the iMac. [MacRumors]