Organic Motion, a startup that makes software that will help enable a new generation of simulation products and even gesture-based computer controls, has raised $7.4 million from the Foundry Group, bringing its total funding to somewhere in the range of $10 million. The startup’s software could usher in the reality of room-sized applications as well as allow people to visually navigate and manipulate huge amounts of data. And Organic Motion is the second gesture-based startup to get VC money this week — Canesta raised $16 million on Tuesday.

Organic Motion’s software allows commodity x86 chips and a few basic cameras to generate a 3-D avatar that can follow a person’s motions and replicate their activity on the screen without using any bulky sensors or a suit. It’s already used to create simulations for the military, and has obvious uses in online worlds such as Second Life where one could direct their avatar merely by moving their body.

The software takes touch controls a step further by alleviating the need for a user to actually touch anything; instead they just face a camera and act out the gesture. As the web graduates to images from text, using gestures and touch may become more useful than a keyboard and less irritating than a mouse.

Gesture controls would allow for a fundamental shift not just in the input device, but the way we experience an application. Some companies and analysts are trying to envision life-size applications in which a projector or multiple screens are used to display applications in a more compelling format, rather than limiting oneself to a monitor (or even three). As we move to a 3-D Internet (GigaOM Pro, sub. required), enabling an immersive web isn’t so far-fetched, especially with software that can take advantage of the chips and cameras computers already have.

Image courtesy of Organic Motion.