Doodling in Space

Hi, just thought I'd tell you what I've been hacking around with today, while I wait for my next movie to download off DC++.
I programmed a neat little utility that will attempt to locate almost any type of physical object (preferrably round and of a distinguishable color) in front of my iSight camera. By "locate" I mean calculate its 3-dimensional position in space. The idea is to be able to use some sort of trackable object to do 3D manipulation or drawing.
It actually kind of works already and is definitely pretty cool to play around with. The downside however is the comparably bad resolution of the iSight. For instance, as a test I made a little background app that lets me control the mouse by moving an object (in this case a Labello chap-stick) in front of my iMac. The cursor than mimics the movements of the object. Although I can actually manage to get to even small spots (i.e. close-button in a window), it is rather tedious, as A) you need to hold up the object, which gets rather tiring, and B) due to the low resolution of the camera and air static, the cursor has a "shivering" effect, even when you feel you are holding the object perfectly still.
So the question is, if drawing in 3d (which is even more difficult at the moment, as moving the object in the depth-dimension is even more unstable), will actually work out with this method, and above all, be somewhat useful.
I guess, if all else fails I could atleast post a lib for this online, so that people could incorporate it into some cool game. It's like having a Wii-Mote for free :P.
Anyway, my new movie is just about done, so I'll get back to wasting time! Cheers, mates!