I agree that the interface is much more important with this, where you are immersed, than iPhone where you can step away easily. The adjustments people made to iPhone were getting used to a non-textile keyboard and finding other controls on the screen -- but those controls worked well. Shake reduction could probably help significantly. Definitely some sort of stabilization in the representation between you and your cursor.
I'm not sure if position finding for the head is very separate from rendering, just because it is so smooth when he moves. I think head positioning is very separate from gesture positioning -- which is why cursors are jumpy. Maybe 13of40 is right on getting used to the interface -- maybe the user is holding his hand out too straight, not straight enough or something to that effect, but that still seems more of an interface problem than user problem. I do wish it was priced closer to oculus. At that oculus pricing I would probably get one, but at 4x it seems not quite there (interface and lacking apps).
13of40 - I think it is more "version 1" issues with the shake and a lack of the best human-to-computer interface rather than an "interface that nobody's used".
Put-that-there[0] is an interface from the early 1980's that seems like it would do well to reduce the janky interactions. Speech recognition probably isn't quite where it needs to be for a generic setup (as opposed to the structured setup of put-that-there).
Like I said, the computer to human side -- rendering virtual objects over a real field -- is beautiful. The quirks with incomplete map information aren't too distracting because we are good at filling in the gaps. The human to computer side needs work because it takes 30s to do a simple resizing operation. If you could say "make that screen 90 percent of my field of view" at any time the vid author wouldn't be complaining that getting too close causes clipping of his field of view.
[0]http://m.youtube.com/watch?v=0Pr2KIPQOKE