Positional Tracking: What it is, how its done, and why Valves tracker is a revolution

Positional tracking is what everybody always wanted motion controls to be. In the above example, if we could accurately track the position of our hand in space (i.e. knowing with absolute certainty where it was every single time we checked, in X, Y, and Z) then we could let a physics engine take over and actually launch the ball correctly. It’s not triggering a pitching event in this example, but rather our actual position of the hand is influencing a physics engine. This is how reality works, and it feels much better.

I don’t usually link to forum posts, but this one by Krejlooc on Neogaf explains in-depth, yet in plain English, a) what positional tracking is and b) why VR enthusiasts should be stupidly excited for Valve’s solution.