The blog circuit is finally getting some hands-on time with Project Natal, and there’s a lot of excitement about it. The breakout game in particular seems to get people to really appreciate the power of the peripheral, even more so than the Burnout demo we’ve seen so many places. A big part of that is the barely noticeable lag that accompanies the system. Unfortunately, barely is just enough to make for a frustrating game experience.

MTV says the delay is about .1 seconds – just enough that you’ll notice it, especially in games like Burnout where to-the-millisecond response becomes important. That kind of delay is bad enough for finely tuned controls that it could take Natal down to something neat you show your friends once. That is, if fine control were all Microsoft was after.

One really cool feature of Natal is head tracking. It gives the viewer a whole new level of immersion by changing the image on screen based on the position of your eyes relative to that screen. It’s something Johnny Chung Lee demoed using the Wiimote some time ago. It’s just one facet of Natal that will take it beyond a simple control device to creating a new kind of experience with games.

Right up there with an AIDS vaccine and teleportation, Project Natal has made Time Magazine’s “50 Best Inventions of 2009” at number five. I’m still not sure whether it’s an ordered list (let’s hope it’s not) but the peripheral’s placement is yet another confirmation that people think this is a really big deal.

Here’s the text from Time’s list:

Since time immemorial — or at least since Pong — one barrier that has stood between gamers and total Tron-like immersion in their video games has been the controller: the joystick, trackball, mouse, light gun or whatever. This year Microsoft demonstrated a technology, code-named Project Natal, that enables players to control games using only body movements and voice commands, no controller required — the gamer’s body becomes the controller. Project Natal uses several cameras, plus a highly specialized microphone and a lot of fancy software, to track the gamer’s body and interpret his or her voice. You move your hand, and the Master Chief (or whoever) moves his hand. It’s that simple. And that cool.

Really, it’s not that simple. But it is cool, and nice accolade for the gaming industry.