My initial idea was some sort of VR musical instrument, I was inspired by lots of things but, somewhat embarrassingly I drew quite a bit of inspiration from the Holophonor from the Futurama Animated Series. Upon further investigation of this I found that the writers of Futurama were inspired to create this instrument from an instrument that Issac Asimov includes in the Foundation series of novels called the Visi-Sonor.
My device will have the player interact with a grid laid out in front and around. How the player moves his arms/fingers through the space in front of them will manipulate the sound that the device produces.
This requires some sophisticated sensors and computing power, but it could be a simple monophonic instrument like any wind instrument or a multi-phonic instrument limited only to how the user customizes the interface. For example, the piano is limited to one sound being played on up to 10 different notes. The interface could allow a single finger to play multiple notes depending on the depth the user is occupying in the virtual grid.
I imagine this might appear first on a heads-up type of display or even a google glass device.
I want to have the note and tambre selection isolated in the arms/hands/fingers. So the note velocity could be dictated by a breath controller. These already exist as a potentiometer. I would add some sort of haptic feedback device to help the player establish a better affinity with the virtual device.