There is some pretty cool AR on the Xbox 360 - Happy Action Theatre/Kinect TV Party (Same game, different names, one is the expansion). One of the ones that impressed me the most is you can get struck by lighting and dance as a skeleton (and even see what is behind you!) Really play 'the couch is lava!' And destroy cities as a giant Godzilla/King Kong monster.
Another one is a free Kinect Labs demo for The Advengers, where you and a friend can be a super hero. I was rather surprised when I set the couch on fire. It's doing some amazing math crunching on 10 year old hardware (360 came out in 05.)
But those you only see in the TV screen. The helmet could make it so immersive. I am looking forward to a demo.
The major problem (assuming it work) would be not every wanting to leave the world of something like Elder Scrolls VI.








