The motion controller demo given at E3 by Sony was pretty impressive in my opinion. Sony gave some more details
on the product at a Developer's Conference which uses a combination of accelerometers and the camera to provide lag free movement. The camera, which is the standard PSEye camera that you can pick up now, tracks the colored ball of the wand and it can use the full RGB spectrum of colors to do so. The controller doesn't have to be in the camera's view however to work as Sony says it will still be fine if you wave it around behind your back. Of course supplies are limited right now for developers so you'll have to present your idea and be white-listed before you even get one.
Out of the three that were shown/available I'm still more intrigued with Project Natal but the precision and accuracy of the Sony product is damn awesome. I'm still not that much of a fan of the WiiMote with the MotionPlus add from what I tried out at E3 but I'm going to give it another chance with Wii Sports Resort
. I heard good things about it with Tiger Woods
though. The demonstration by Sony puts it in a class above the WiiMote in my opinion but we won't know how well it truly works until it gets released. And that in itself is a question since all these tech demos are great but they mean nothing until we have the products in our hands and can use them in real world games.