When you go to a movie projected in 3D, you’ll often see grown men and women swiping in the air as if they could touch the images floating in front of them. Wouldn’t it be wonderful if we could actually interact with the objects in 3D space? Even better, what if the object in 3D space was viewable from multiple angles like a hologram? That’s what a company called Infinite Z is doing with its display and input device that goes by the name zSpace. This technology combines stereoscopic images with infrared cameras that actually track head and hand movements to construct a more realistic holographic effect.

For the zSpace illusion to work, you need to wear a pair of special glasses. Not only do the glasses perform the required image separation for stereoscopy, but they also have embedded infrared reflectors to help the system track your head. This allows you to move your head so that you can view a hovering object from different perspectives. The screen actually changes what is being displayed based on where you’re looking at it. This innovation allows the illusion of three dimensions to work much more effectively. When you add the ability to manipulate objects in 3D space with its special stylus, this stops being a gimmick. This actually has real-world uses now.

The zSpace is designed for professionals working in fields like 3D modeling, so it is priced accordingly. It’s available for $3,995, but the MIT Technology Review notes that people enrolled in Infinite Z’s developer program can buy a device for only $1,500. For those of you interested in developing software that takes advantage of this technology, an SDK is available for download alongside documentation and webinars covering relevant information.

This technology isn’t just useful for professionals, though. Browsing through a white paper written by Robert Earl Patterson [PDF], with help from Infinite Z, it’s obvious that the potential for interactive 3D displays is endless. The 3D technology in video game systems like the Sony PlayStation 3 or Nintendo 3DS is child’s play compared to the capabilities of this system. When these interactive 3D displays work their way downmarket, 3D gaming will actually make sense. When you can interact with a digital object as if it was real, that experience can lead to interesting and unique gameplay instead of the tacked-on 3D we have now.

Alternate reality and 3D immersion have been promised for a long time, and this is a big step forward. With traditional 3D technologies, the illusion is broken the second you start moving your head around. If this technology can get enough momentum in the high-end market, consumers will reap the benefits only a few years down the road. Now we wait for the price of this technology to drop low enough for the consumer market.

Now read: 3D TV: Will 2012 be the year to trash the glasses?