There is a lot of interactive/mixed reality fun stuff created using Processing and Kinect's SDK. a nice idea would be to integrate Kinect and BS Contact for some novel ways to interact in vrml/x3d worlds. Imagine a installation where your avatar is controlled with the physical movements of your body... alas, my coding abilities are non-existent, but i would love to be able to help to implement this idea!
It is being done.
A mention here:
http://www.perivision.net/wordpress/2011/06/microsoft-kinect-gives-a-face-to-a-3d-avatar/
With two avatars. Another example of ongoing work with live 3D avatars using Microsoft Kinect by Bitmanagement Software and IVN.
http://vimeo.com/27439099
Look at this other video here
http://www.youtube.com/watch?v=XP-celeobvQ
Links to technical info here:
http://web3d.org/pipermail/www-vrml_web3d.org/2011-September/000085.html
Amazing, particularly the overlaying of a real person over an avatar in real time. Of course, had to be those curious M17 design guys...
Glad you like the video :)
http://ivn.net/demo.html