A quick one since I have stuff to do tonight...
Ok I tried it. For anyone who's used Apple's Photo Booth, EyeCreate is similar but deeper. The use of the controller is less natural than a mouse, but it's very easy to use. There are quite a few photo/video effects such as neon glow, stop motion to choose from. You can also add (up to 1) audio track to the video but all you can do is to save the "movie" to PS3's HDD.
Because PS Home was delayed, there is very little context for EyeCreate. It remains largely a curiosity for now.
Still not sure why they don't want to/have not augment the XMB and Blu-ray player UI with PS Eye.
If Sony introduces a robust, minority report style UI for its player, it can appeal to more people since everyone can appreciate convenience (No need to look for remote). It is not necessary to rely solely on Blu-ray from the get-go. Simply market PS3 has the most advanced DVD and Blu-ray player in the world. Then continue to convert them to try out Blu-ray movies and games. As long as the UI is fun to use, people will buy more Blu-ray movies and games to "see" it (e.g., using a cue followed by a wave of hand to fast forward/rewind Blu-ray movies). The current player UI is very convoluted and clumsy anyway.
I have not tried Eye of Judgment yet (My office is too cluttered now).