Here’s the first hands-on video of the Project Natal from Engadget at the E3 2009.

“The first thing to note is that Microsoft is very protective of the actual technology right now, so they weren’t letting us film or photograph any of the box itself, though what they had was an extremely rough version of what the device will look like (not at all like the press shot above). It consisted of a small, black box aimed out into the room — about the size of a Roku Player — with sensors along the front. It almost looked a bit like a mid-size (between pico and full size) projector.”

Video after the break.