Something I put together this past weekend with the LEAP motion controller dev kit. It was tons of fun being able to interact with the puppets using your hands. I will post further updates if this develops.
If you are unfamiliar with the LEAP, its awesome. Check it out here https://www.leapmotion.com/.
This concept could be turned into a really great educational experience for pre-school and kindergarden kids. The kids draw the picture, the teacher scans it in and marks the joints and then the kids can interact with it on screen. Joints need to be like rivets, so that the puppet moves a little cleaner.
Video was quite entertaining. 
Thanks lockbox!
You actually pretty much described our current game concept that we are working on
The Leap integration is new though, I was just messing around but I will continue to work on it.
Hi Dchen -
I’ve been trying to rig up a 2d character with similar puppetry properties but having issues with it.
I’m using character joints to join each piece of the anatomy etc and wondered if that’s the right way to go about it?
Thanks for your advice.