Straight from TeamXbox:

We are finally able to talk more about what we know after a patent application for a gyroscopic-based input device by Microsoft has been published on the U.S. Patent and Trademark Office.

Described as a “computer pointing device (generally a mouse but alternatively a game controller or remote control device) that may be worn on the hand and operated without needing to contact a (mousing) surface,” this patent was filed back in 2006.

We were told that the motion sensing controller that Microsoft was researching had the functionality of both the Nintendo Wii Remote and the Nunchuk packed into a single device, with a shape that is neither that of a banana, nor a remote controller, but more like a “pistol grip.” On top, it is supposed to have an analog stick (that could be replaced by a trackball) surrounded by the four action buttons.

SOURCE Via Xbox-Scene