Pixy camera as an input device?

Well thats not bad I suppose...I moded a PS eye so that it ONLY track IR, and it captures at 125 FPS, and with FreeTrack it's "ok", but there are all kinds of things you might be able to do to get latency down. Can I assume you are planning to use OpenCV? If you have not seen it I would take a look at that, as I have seen tracking with Arduino go off quite well with this Library. If I was you, and had the time and the hardware I would give it a shot just to see if it was viable. Even if it is a little slow at first there are always things you can do to improve on that;O) Please let us all know how it goes, things like this documented are helpful to all:O)

*edit* Oh! Its not just a camera! Let me look a little further :O)

*edit 2*

You know what I would bet you CAN make this do quite a bit as a controller for the rift. I would give it a go, this looks cool. i think Ill grab one too.