As others have said here in the thread, Engadget reports:: Microsoft is using 3DV Systems ZCam
http://www.engadget.com/2009/06/03/microsofts-project-natal-roots-revealed-3dv-systems-zcam/
We had a hunch that 3DV Systems’ technology—which we actually toyed with back at CES 2008—had something to do with Microsoft’s newly unveiled Project Natal motion tracking solution, and today details have trickled in to us confirming as much. As the story goes, 3DV Systems was initially hoping to have the ZCam in the manufacturing process by the tail end of 2008, but Microsoft swooped in and acquired the outfit just weeks after it blew minds in January. At the time, not much thought was given to the pickup; now, however, we’re treated to a bona fide ZCam brochure which details the actual specifications behind the Xbox 360’s newest friend. Granted, we have every reason to believe that Natal has advanced significantly from what you’ll see in the gallery below, but it’s still a tasty nugget of behind-the-scenes information. Of note, the former 3DV Systems VP of Business Development was quoted as saying that the target retail price of the ZCam was $100, though it still had aways to go as of early 2008.
http://www.engadget.com/2009/06/03/project-natal-video-hands-on-impressions-and-further-details/
After our meeting, we actually had a chance to speak with another source who was able to show us the software guts behind the Natal, so that we could understand the method by which tracking is done. The box uses two sensors for input: a video camera, and an infrared camera (that light you see in the press photo is either power, or some part of the IR setup). The infrared data is used to gauge depth and the video camera movement, but it’s the software Microsoft has developed which is really doing the magic. We were shown an example of the raw output of the system, which melds the two sources and then breaks them down into a wireframe of objects, a heatmap (for depth), and a point-map (which is akin to one of those hand imprint needle toys). The software merges all of this together to create a picture of movement in the room, allowing for some pretty crazy detail of what is going on. We watched a chair being dragged into the middle of the playing field, and the software was able to continue to track the human movement, as well as that person sitting down—it didn’t break a sweat. The accuracy is far better than you would imagine it could be; it’s very impressive stuff.
