Johnny Lee, a PhD student at Carnegie Mellon, appears to have invented one of the most promising home virtual reality displays I've ever seen. To do so, he attached the standard Wii sensor bar to a pair of glasses and put the Wii remote on the TV (essentially reversing the typical usage).
The effect is surprisingly convincing - click play, or visit YouTube to watch Johnny demonstrate his Wii-based VR system. If you want to skip all the setup, the 3d head tracking starts at 2:45 into the clip. via zdnet
To see some other great projects from Johnny Lee, including more using the Wii, check out his CMU Projects Page.