Matt Biddulph has published notes on how he connected a hardware knob with a second life parameter. Second Life is a computer world where you can create objects, manipulate them, sell them, within a three-dimensional world. Matt used an arduino board, a kind of electrical device you can plug into a computer and play around with electronics.
The direction this is going is exactly what I love: connecting the world of information (secondlife, the web) with the physical world.
Now what I would love to see is to use the Nintendo WII hacked, so that I can use the WII wireless controller to get the Secondlife stuff moving.
It seems this hack is still to be done, but this video gives a light impression of what I mean:
The guys from zedomax.com have used a CUBLOC controller to create a Joystick USB device for a PC. But not a joystick, a six-axis-of-freedom-controller. The glue is some basic code on a basic controller.