Well, well. Naughty, naughty.
Someone managed to film what appears to be a live demo of Milo and Kate with Project Natal from the Peter Molyneux BAFTA lecture that took place last night.
It shows someone showing drawings up to Milo... and him accepting them and showing them!
Watch the video after the jump.
It was confirmed at the same lecture that Fable III will also support the motion tech.