E3 2010, TGS 2010 and Nintendo's Conference all came and went without even so much as a snifter of new information about the Vitality Sensor. Although Nintendo is still keeping the device behind closed doors, Siliconera has uncovered patent applications that reveal more about how the sensor works as well as its potential applications.
Essentially, the technology works by emitting a tiny amount of light at your finger and detecting how much light bounces back to a sensor. As you become more stressed, your pulse increases, sending more blood around the body, including your fingertips. Haemoglobin, a protein used for transporting oxygen, absorbs some of the light emitted by the sensor, so the more haemoglobin present in the fingertip the less light can be absorbed. In short, stress = more haemoglobin = lower light readings in the sensor.
Okay, science lesson over: how can this apply to gameplay? The patent gives an example of a player piloting a flying character around a confined space, with the player's breathing having to match the ceiling's shape to allow the craft safely through. It may not sound like the most thrilling way to spend an evening, but then it's not supposed to.
Hopefully one day soon Nintendo will reveal more of the Vitality Sensor's applications, but until then let your imaginations run wild.