Hey, I just ran across your blog via the "Life at Microsoft" video and I'm diggin this blog!
First off, I wanted to ask what that Mac lookalike laptop you were gaming on was. I thought that was humorous.
Also, I thought it'd be really cool if they set this thing up with Wireless USB or Bluetooth (not sure what the data transfer requirements would be on something like this) then it'd feel even less like a game because you're not tethered into a computer. Throw in some goggles with accelerometers that turns the field of vision every time you turn and a wireless controller that looks like a gun, and you're really immersed in a gaming environment!