Add this to the project lists of Kinect enabled applications to blend the physical and digital worlds.
The UC Davis W.M. Keck Center for Active Visualization in the Earth Sciences built this for an National Science Foundation funded project on informal science education and were inspired by a project from a group of Czech researchers who showed an early prototype of an AR sandbox.
A lot more information is available on the project site and the team confirmed that these sandboxes will be set up as hands-on exhibits in science museums, such as the UC Davis Tahoe Environmental Research Center (TERC) or Lawrence Hall of Science. I know a few architects who may be interested in a more advanced version of this.
thanks to Long Zheng for finding this in the sea of Kinect projects of late.