I came across this blog entry from IEEE Spectrum about a video game based on the $100 Mindwave headset from Neurosky. The reviewer is clearly impressed!
We are starting to investigate new techniques for creating wireless EEG headsets. The two leading companies in this area (Emotiv and Neurosky) have a reputation in the community for being insufficiently high-fidelity to suppor research grade recordings. The Emotiv only has a handful of channels and none of them are over brain regions correlated to motor planning or execution. The Neurosky (at least as of this writing) only has a single electrode over the forehead (FP1). Its not even clear that these devices are recording pure EEG - its more likely they record a combination of EEG and muscle artifacts.
In our lab, we've been trying to develop our own EEG-based brain computer interface system. For our first attempt, we used the Clevemed Bioradio to acquire EEG signals using an old EEG-cap we had lying around. The signal to noise ratio was a mess and we could barely get enough signal fidelity to move a cursor in one dimension. Since then we've upgraded to a higher quality EEG amplifier (a mint-condition 20-year old Grass Model 12 Amp with 22 channels that was donated to us by a very kind emeritus professor in Psych) as well as a snugger-fitting EEG cap. These two upgrades have improved the signal to noise ratio but we have persistent problems with the impedance between the electrodes and the scalp (the Model 12 allows us to measure the impedance). We are learning that even the world's nicest EEG amp won't do you much good if your electrode impedance is too high (say, greater than 10k Ohm).
Ultimately we'd like to design a research-grade wireless EEG system. Our biggest challenge (and one we feel hasn't been solved by either Emotiv of Neurosky) is to reduce the electrode/scalp impedance down to a more manageable level.