Trackmate is an open source initiative to create an inexpensive, do-it-yourself tangible tracking system. This video shows a few different ways to setup the system along with a handful of applications. Everything is open source and available for download. Check out more information on the project's website if you are interested in building a Trackmate system yourself!

trackmate.sourceforge.net

Trackmate is a project from the Tangible Media Group in the MIT Media Lab.