Is this a photo from the Adult Expo running simultaneously with CES 2007? Are these men watching droop-jawed as someone tweaks a tiny rubber iBreast? Well no, sadly nothing so exciting; it's just a demo of Logitech's 3D CONNEXION controller. Responsive to twisting, tilting, pulling and pushing in all axis, they used it to intuitively navigate a world map.
I guess Logitech has virtual worlds like Second Life in mind, using the 3D controller as a straightforward way to move about without needing to memorise separate "look left", "look right", "spin round" keyboard shortcuts.