Ilan Spillinger, Microsoft's Xbox 360 VP, was on hand in Tel Aviv yesterday for a showcase of Project Natal. Although there wasn't much in the way of groundbreaking stuff, the resulting video does show off the motion control system's gender recognition (done through Natal's facial recognition ... you filthy child) and ability to track two players within the frame at the same time. A tipster from the audience tells us that earlier lag issues have been eradicated, although some jitter was indeed apparent when the second person stepped into Natal's field of vision. Either way, it's looking like Microsoft's Xbox 360 peripheral is progressing well toward its release near the end of this year. Go past the break to see for yourself.