The is called Rope Revolution. The rope was designed using a Wii controller and recognizes a variety of gestures using a sensor in the wall and an accelerometer built into the rope handle. One of the sames is kite flying. The simulation is composed of a virtual kite on the screen which is an extension of the actual rope controller by the player. The other player across the globe can feel the force and tug on the rope, making the experience a virtual reality.
Other games include wood sawing, horse riding and jump roping. Lining Yao, the graduate student leading the project, plans to set up this system in Shanghai, so that children there can play with people at the Media Lab.
We also recommend watching: "iButterfly: Catch Augmented Reality Butterflies with your iPhone!" and "Siggraph: Japanese Touchable Holograms".
Rope Revolution: Fly Kites With Friends in China
