Microsoft has an IllumiRoom project that projects images onto the entire wall of your room. It's pretty crazy, when you're playing video games, the IllumiRoom will show you what's happening around you on the screen too. Basically, you get what giant wall TV for playing video games.
As IllumiRoom is only a research project, we shouldn't expect to see it in our living rooms anytime soon but the video was made in real time and captured life. The video above wasn't special effects wizardry. Supposedly, IllumiRoom uses the Kinect to get the geometry of the room you're in and then uses a projector to adapt the extra visual to your wall. It definitely makes for a more immersive gaming experience, you feel as if you're inside the world of the video game. [Microsoft Research via Engadget]