Not necessarily, they are likely using the glove-less Handpose technology that Microsoft Research developed.

http://research.microsoft.com/apps/video/default.aspx?id=230...

I would almost imagine gloves like this would be a requirement for precise control. The Kinect had seemingly pretty decent limb sensing from the few minutes I played with it (it was able to accurately model the bones in my fingers moving). However, it had an advantage in that it was a few feet away, viewing you straight-on.

This device will be looking nearly straight down instead, and seems to me that your limbs & fingers will often occlude what is behind them. I doubt the twin cameras used to sense depth would be far enough apart to always see your fingers behind your other arm, for example.

If you want to see similar technology that's being used now, check out the Leap Motion being used with the Oculus Rift. They mount it on the front. I've personally only got experience with the rift (I have a DK2), but I've heard good things.

I think Oculus has it right, though, in that any HMD that does positional tracking needs super low latency to feel natural. Should be a little less problematic since the whole world wouldn't lag, but I'd be disappointed if the virtual overlay had perceptible lag after using some of the better experiences on the rift.