Immersive gameplay where you become the character in a game is an interesting concept and one that I think the Xbox Kinect will do pretty well at.  Below is an interesting video from a developer experimenting with augmented reality and the Kinect. There are some nice touches in there such as body mapping to paint the characters costume, object detection for the particle beams. Also watch out for the example of diminishing reality thrown in at the end.

httpv://www.youtube.com/watch?v=rTV9kDtzi1U

Related posts you may like:

1. Top 10 Augmented Reality Concept Games – Part I
2. AR Monopoly Concept
3. Some Cool Educational AR Demos
4. Top 10 Augmented Reality Concept Games – Part 2
5. Augmented Reality Playboy Concept