I know some artists who could build great live performances around a Gypsy MIDI suit, and others who would merely look like plonkers. As to the first question, here at Cassiel Central we’ve been through all manner of MIDI controllers and sensing systems, from fader boxes (motorised and not) through accelerometers, ultrasound systems, camera tracking, joysticks, game controllers and Buchla devices, and some common issues emerge. Conventional controllers such as keyboards and mixers have controls which can be physically moved, so that they can be operated by touch and inspected visually. If the controls do not move and offer no visual feedback, then a layer of cognitive support disappears, and one tends to lose accuracy and/or sophistication. If the controls cannot even be seen, then even more accuracy is lost. So, the Gypsy MIDI is always going to be a low-resolution controller compared to traditional devices, but whether this matters depends on what you’re trying to do with it. On the other hand, controlling sound (or for that matter, video) by moving one’s arms and wrists is really rather fun.
This is quite similar to my experience with using various motion capture systems for performance (computer vision, Vicon, Polhemus, etc.). The lack of feedback (visible and tactile) drastically reduces the control possibilities, but also opens for some interesting creative possibilities.