3DV is the use of video-based depth sensing technology. Basically by using a webcam sized 3D sensing camera, the players hands can be found, and thus not confused with other objects or even other hands, and these can be recognised by the game. This simple “next-step” from Wii Motion would make games playable without the use of a controller.
The camera detects the location, depth, and dynamics of the players hands, in 3D, enabling much more motion playabilty than Playstation’s Eyetoy or Nintendo’s Wii can do now.
Here’s a link to an article from TeamXbox.com, with some pretty cool videos.