I read a review that suggested it was fine on an xbox - I think once calibrated its 'reasonably' accurate.
Also, triangulation overhead should not be a problem - so long as they dont send pure video from the camera down the USB connection and then decode it.
The biggest problem with there setup is that with only 3 points for calculation, as soon as you move you body stance/location of the gun, you completely mess up the calibration, and it needs to be recalibrated. This renders it useless to me.
The only similar-technology product that solve this one is the TrackNav/SmartNav products, where they have an option of using a "Vector" addon - which basically means they have several points being tracked on a known shape, giving 6 degrees of freedom, which should mean once calibrated you could probably walk off and get a drink with your pointer and come back and keep shooting.