It was inevitable, and it's happened. This is Second Life connected to Kinect, with basic controls such as avatar gestures and camera movement controlled by physical gestures:
This hack is from USC's Institute for Creative Technologies, who created a similar innovation linking Kinect to World of Warcraft. With this new software, you can pantomime a wave, brow, hug, or flying, which your avatar then copies in Second Life. I also admire the camera control which is triggered with Minority Report-like sizing gestures. As you might imagine, I'll be writing more about this as soon as I can.