Project Natal blew our minds yesterday during the E3 2009 Xbox Media Briefing. Project Natal is a new method of playing Xbox 360, with no controller required. Instead, it “sees” your entire body, and tracks your movement in 3D, and even responds to voice commands, directions, and even your face. We’ve got a video demo for you above, which you should take a look at, as well as a bunch more info on this exciting product. Read on.

So if you are wondering how Project Natal will change the way you game, let us explain:

Controller-free gaming and entertainment. This is the basis of Project Natal. There is no controller required. We aren’t just talking about gaming either, as you can fully navigate the Xbox 360 dashboard controller-free as well. There’s a sensor that rests above or below your television that tracks your body movement in 3D, recognizes your face (and logs you in to your profile just by face alone), and reacts to your voice commands.

Full-body play. You know how the Wii is pretty much restricted to your hands? Project Natal uses your whole body. That means you can do things with your head, hands, feet, torso, etc. Imagine having a boxing match where you actually block and swing with your hands, but dodge and weave with your torso. Or having a karate match using your feet and hands.

Personalized to you. Because Project Natal links your face and voice to your Xbox profile on the console, all you need to do is step in front of the sensor to log in and get access to your profile. You can speak to characters in games with your voice, and they’ll “know” who you are just by looking at you.

Got all that? You’re probably wondering how it all works, right? Well, here’s are some answers:

Project Natal sensor. Project Natal uses a fairly advanced sensor to do its magic. The Project Natal sensor combines an RGB camera, depth sensor, multi-array microphone, and a custom processor that runs some proprietary software. Combined, you’ve got a sensor that tracks body movement, individual voices, and recognizes faces.

RGB camera. The Project Natal video camera is an RGB camera that delivers the three basic color components to the Xbox 360, enabling facial recognition and full body tracking.

Depth sensor. The Project Natal depth sensor is an infrared projector combined with a monochrome CMOS sensor, which allows it to see the room in true 3D, as opposed to trying to guess from a 2D image. The cool thing about this is it works under any lighting conditions, although we aren’t sure about pitch black. Try it.

Multi-array microphone. Project Natal has a microphone that is able to locate voices by sound, and extracts ambient noise (like your crazy loud fridge.) This allows headset-free Xbox Live party chat, and is what lets Project Natal identify you by your voice.

Custom processor with Microsoft software layer. Controlling all this hardware is proprietary Microsoft software, which is what brings Project Natal to life, and according to Microsoft, is what differentiates Project Natal from any other product on the market.

So the only question left is, “when does it launch?” Unfortunately, Microsoft hasn’t gone that far yet. The wait is going to be painful. If you wanna see what you can do with all this technology working together, check out Milo, an amazing title being developed by Peter Molyneaux at Lionhead Studios.