Igalia's Skeltrack is a completely open source skeleton-tracking programming library for the Kinect. It can track up to 7 joints, including in the neck, shoulders, elbows, and hands. This gives a pretty large range of motion tracking potential for the upper body of a person.
The Kinect uses a camera to track movement, but it's not perfect. Clothing and other factors can cause the Kinect to misinterpret movement pretty easily, as can poor lighting. Skeltrack tries to solve this by using mathematical equations and heuristics, forming a map of your skeleton as it scans to more precisely track your movements. The library includes the drivers and code to allow interactions with your PC and the Kinect hardware in order to run the tracking software.
Check out the to see how it works.
As a brand new piece of software, this is a pretty ambitious project. Open sourcing skeletal tracking can have all sorts of benefits for science and medicine, not to mention gaming and motion functionality for consoles and other media devices. In a world where more and more technologies are moving towards motion sensing, a true open source programming kit for the widely popular Kinect was only a matter of time.