Digital Effects for MSN Messenger

Microsoft Research - Digital Effects for MSN Messenger

"Digital Effects, a plug-in for MSN Messenger video chatting, produces special effects for video communication. While the plug-in loads, users can select 3-D costumes or other digital effects in a pop-up window, and those effects will be applied to a selected photograph. Users also can blur the background of photos to help protect privacy." [Description Leached in Full]

That sounds like it might be fun to play with...