What's interesting is that Microsoft showed that awesome Illumiwall concept at CES.
Given how close that is to the expected E3 reveal of the Xbox 3, it'd be incredibly dumb to show that if it wasn't included in the new Xbox.
But I'm pretty skeptical that the Illumiwall can actually work without serious hardware. As we discussed in the thread, you need a projector (which is both costly and annoying) and that projector likely needs its own CPU for some processing.
Expensive, and of limited use. So I'd put money on it being at E3, but will it be one of those "coming shortly after launch" features that are so common and never show up, or will it be one of those gimmicks like R.O.B., that cost additional money over the basic package and get supported by like 3 games and quickly forgotten?