Okay.

Pretty cool, however why is it not just their real faces?

Looks useless. Exactly like every other enhanced reality app/game.

Will it still recognize me after I shaved my beard? (Rather serious question...)

the webcam on my computer, has the exact same function as this, does not recognize my mouth when I have a beard (talking of a 2 month beard not 1 week).... so yeah it should have an easier time without the beard.

oh and this is useless... people will find it fun once... then use video.

That's not good. I usually grow my beard for 2-3 months and then shave.

It's a different system, but I downloaded a DSi Ware game using the camera on my 3DS and the recognition isn't very good (maybe because of the beard). :/

I hope the technology that Vita uses will be a bit more advanced.