In an excerpt from the interview, Satchell revealed that Microsoft actually looked into using stereoscopic technology (seen in the upcoming Ubisoft game Avatar and Texas Instruments' upcoming DualView TV) for gaming. Ultimately it was determined the need for special glasses made the idea impractical. "I think it is hard to be mainstream with asking people to wear headgear to play games," he said. We'd prefer the headgear above, thank you.
While technology is being developed to overcome some original obstacles for stereoscopic displays, Satchell believes the possibility of the tech is, "very interesting." As Joystiq pointed out, we're officially one step closer to the "Holodeck," people! Awesome?