Sounds interesting but that tech seems very far from production. The method described would either require you to site very still or have amazing resposne time so far as I can see. Any misalignment of the signal to where your eye is and you're talking blurs and no doubt the whole 'headache' scenario.
But, they made a huge fanfare about Natal which hasn't actually released yet, so I guess pushing something that looks even further from production wouldn't be a stretch.
I thought MS said 'no way' to 3D though?
By the way - reading that I get nothing about current TVs. How would you watch a 2D image on your current TV while having a 3D image beamed to you from this? Surely the image coming through this lens is the one you need to receive not the 2D image from your TV?
In fact it sounds like this replaces your current TV.