Microsoft has been granted the patent for a "wearable electromyography-based controller," which tracks a user's movements based on the electrical impulses sent to their muscles.
The patent imagery has the tracking device envisioned in several ways. The main one is an arm band that sits just below the elbow. Presumably this would track a user's hand and arm movements. However, there are other suggestions, including sensor nodes that attach - perhaps with some sort of sticking mechanism - to the head, forearm, chest and/or legs.
Whether it's an armband of sticky sensors, they all communicate wirelessly with a user's PC, smartphone or other computational device, allowing for wireless control with just the movement of a user's body. Perhaps when combined with the 3D camera abilities of an Xbox Kinect, this would allow for much deeper integration of movement based controls.
The patent covers the fact that any such setup would need a calibration period to allow the sensors to adjust to the individual's body type. Likely this would involve following some basic on-screen gesture instructions and allowing the sensors to detect what sort of electrical impulses are generated by that sort of motion.
It seems likely that this could be abused in a manner of humorous ways, allowing a user to make their on-screen persona perform all manners of impressive actions with simple movements of their own - much in the same fashion as Nintendo's Wii Motes can be abused with a basic shake delivering a high score during intricate dance games.