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Wow.. and I thought MTV is a music TV thing, apparently they have turned into hardware experts now...

But ok, that thing is so utter bullshit, let me just mention a few things:

1. There is an MTV guy who uses a stopwatch to measure short time delays. The brain to finger delay (the time between your eyes trigger something and the time until your finger reacts by pressing the stopwach) is anywhere between 80ms and 200ms (depending how well trained and fast and old and ... you are). This nullifies any idea that the guy was able to accurately time "between 80ms and 120ms". Simply, physiologically not possible. The sad truth is that the guy simply adopted his clicking behaviour to what he saw on screen (difficult to explain the physiology involved, but you may get the point).

2. In the video, there was only one short sequence where the person and the avatar were in the same video pictures. The lag was clearly visible around 0.2-0.3s. This is no surprise as the Natal system has to compare several subsequent frames to determine direction of body movement. At 30Hz, the data acquisition time is already 66-99ms (2-3 frames). Add some overhead for data processing in Natal, sending data to the Box, and data processing in the Box, and you are over 100ms for pure hardware delay.

3. Where is the demo that shows several people playing a game, with speech recognition? Where is the demo that actually shows a real game? Throwing arms and  legs towards red balls may be amusing (for a while), but it is no surprise we've only see this demo so far, as it allows to "cover" lag issues nicely..