BBC researchers have been working on a type of "surround" video for a couple of years now. Where the Microsoft system would be used with games and therefore the "surround" part of the image is rendered by the console the BBC system uses two cameras, one with a standard lens and one with a fisheye lens, to shoot actual video which is then shown using a TV and a projector.
The standard footage is shown on the TV whilst the fisheye footage is projected via a convex mirror (or it could equally use a fisheye lens on the projector) having first been processed to fit the shape of the room (and not to project on the TV) The effect is similar to the way the human eye works, with a central area with high definition and the surrounding vision at a lower resolution but we can see movement and colour.
Whilst the Microsoft system is more sophisticated and can compensate for the shape of objects in the room, the BBC system works with existing technology and requires very little extra effort on the part of the film makers.
There will be a premiere of an animated film called "Kill mode", which was specially created to demonstrate the technology, at the Sci-Fi London Festival at the British Flm Institute on Sunday
You can see the system in action and read more about it here