Microsoft Rally Ball demo shows Windows Phone 7, Kinect, Xbox Live living in perfect harmony (video)

Though it's billed strictly as a technology demo -- not something we'll necessarily see in any imminent over-the-air update -- Microsoft showed off a pretty cool demo of how Windows Phone 7's Xbox Live integration could take advantage of Kinect down the road at Steve Ballmer's MWC keynote today. How, you ask? Using the Rally Ball game, a Windows Phone user was shown tossing balls to an on-screen character that's controlled by someone else on an Xbox using a Kinect. Simple, yes -- but perhaps as interesting as the Kinect aspect is the viability of real-time cross-platform gaming that Microsoft seems to be throwing its support behind. Seems like a good way to torture your friends into working out from thousands of miles away, doesn't it?

Update: We have a video of this in action after the break!