Unfortunately, the article got the project's emphasis a little wrong.

The teddy bear is a toy. The research project is really about using vision, audio processing and robotics to take interactivity to the next level -- as you move around, the bear's gaze can follow you. As different people talk, it looks at the speaker. If someone it doesn't recognize gets too close, it mimics getting "bashful."

It's really not meant for monitoring/watching over your kid -- it's just a toy. It's not spooky, it's just kida cute.

The people who created it have also created a mobile robot that uses much of the same technology. That, they imagine, might roam around your house (or your office) while you're away and be a form of telepresence -- smart enough to look in the right place to interact with people it might run into, so if you're remote you only have to do a minimum amount of "control" of the device itself and can focus on interacting with people through it.