Gossip Gamer is claiming that the footage below is leaked from some kind of Natal testing.
"This is most likely early footage of the beta testing for a FPS game on the Natal and of course, there is no confirmed source where the video came from so take it as you like (most likely will get you fired if you come out)", are the words used.
Looks convincing and appears to work (the right hand 'looks' while left hand grabs and drags to move around).
However, as evidence that Natal will be of any use in FPSes it's lacking one very important aspect - aiming and firing.
I'm still not convinced that Natal has a solid place in conventional games, much like Wii really, where dual sticks outwins wand waving, and for FPS and RTS games, mouse and keyword beats them all.
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