As someone who has played around with projectors and loves them, this looks extremely interesting.  Read below and check out the video demo...

http://microsoft-news.com/microsoft-research-shows-off-illumiroom-project-at-ces/

http://www.engadget.com/2013/01/09/microsoft-and-samsung-demos-xbox-display-fills-room-with-images/

"IllumiRoom uses a Kinect for Windows camera and a projector to blur the lines between on-screen content and the environment we live in allowing us to combine our virtual and physical worlds. For example, our system can change the appearance of the room, induce apparent motion, extend the field of view, and enable entirely new game experiences.

Our system uses the appearance and the geometry of the room (captured by Kinect) to adapt the projected visuals in real-time without any need to custom pre-process the graphics. What you see in the videos below has been captured live and is not the result of any special effects added in post production."

Its a gimmick, but it could be huge nonetheless as a selling point.

Its a proof of concept, so it isn't even a gimmick yet.  :)

As someone who has had many projectors and will probably buy one in 6 months or so, this could be a very cool immersion bonus. 

actually this was one of the 720 rumors going by the name of kinectWall, could have some cool applications like lighting red in the direction of incoming fire, or disco light for dance central.....but i think it sounds retarded.

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Seems cool, imagine you are playing an open world game and the world extends on your wall.

^^' Mario Kart!!!

That actually looks pretty cool

I think if you setup your gaming area with this type of system in mind, it could be neat/beneficial. Otherwise, no. Just seems incredibly annoying with bookshelves and crap in the way.

Either way, not for me.