The camera features more than just support for interactive gaming, it also lets Xbox 360 users to set and interact with dashboard background for example waving hands to make a watery effect react. Also the Xbox 360 music player will be able to use the camera to capture what is going on in the room and visualize it with "psychedelic" effects.
Games such as Tom Clancy's Rainbow Six: Vegas and World Series of Poker: Tournament of Champions will use the camera for creating both portrait and profile models from the player's head. The camera will also be used for gesture-based games as well as some other Xbox Live Arcade games.
Source:
GameSpot
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