Microsoft promises Milo is the next step.

[binary solo]

I dunno. I don't see the amazingness of this. And to say SF writers haven't thought of it is PR BS. OK strictly Molyneux is right because what SF writer has ever thought of using an AI character that only resides in an immobile TV screen? No all SF AI characters are cyborgs or the like. So I guess Molyneux gets out off on a technicality there.

And I don't see this as being a major showcase for Natal in and of itself. Any camera and microphone set up that has the appropriate resolution/fidelity can be used for voice, face and image recognition. It's the software grunt behind the sound and image inputs that does all the real work. Are people suggesting there's nothing else out there with the processing capacity to handle the necessary software? Dare I say it but Eyepet does the equivalent of the fish drawing then scanning thing (Milo appears to improve on it, but if anything looks fake about the video demo it's this) and you can teach your Eyepet to "sing" (which is sound and pitch recognition, and there is already well established word recognition and response software out there, which again Milo builds on but certainly doesn't establish) and that is a rather cheap game with not much image and sound recognition grunt behind it.

Milo is really putting established and available interactivity together in one package. That is cool and impressive for sure. But amazing and ground-breaking? I don't see it myself. Milo is evolutionary, not revolutionary. Hence I don't really think it is so far advanced that the E3 demo had to be entirely fake for the reasons people think. The video demo was probably tarted up because Milo was not quite able to do everything in the demo in real time as smoothly as was shown in the video. And obviously the interaction was scripted so one can never know whether Milo's responses were equally scripted or extemporaneous, e.g. did Milo have the "choice" to either say he'd done his homework or not done his homework, or was his homework completion status a set parameter?

@ scottie: Santa isn't omniscient, he's omnipresent. Oooh dub-le entendre.