I believe that the video which botocudo originally linked to was this one: http://www.youtube.com/watch?v=LX7KYeyRz4M
I don't believe that what YDreams is using is exactly Kinect, but I could be wrong. I thought that I remembered a technical article from them telling all about how they rigged this up but at the moment all I can find is this: http://www.ydreams.com/blog/2009/02/09/yes-we-can/
On the whole Photosynth and Project Natal/Kinect front, I thought that you guys might be interested in seeing a homemade version of this. Unfortunately they're only navigating the point clouds, rather than the full synths, but it's better than nothing, right?