The basics of it seem simple - a powerful laser or lasers, beams split in a fan pattern, with a web camera or wii camera positioned to see the dot of light on the performer's hands; the laser really is only powerful in order to show the fan for the audience, and to an extent the performer as well, so he knows where to "pluck". However, a basic model (with invisible beams, unfortunately) could be made with a simple red or green laser pointer; with the appropriate filter over the camera, even a <5mw dot will be visible on the camera. Later you can upgrade to a more powerful laser.
The difficult part is the software - you need software that can see the dot or dots, locate them in 3-space, and then use that information to play a midi note (which is then sent on to the rest of your midi stack); this requires a PC running some vision software; its like a Sega Activator on steroids. If I were building one of these, or experimenting with the idea, I would first look into doing a single beam, using a cheapo webcam-based laser rangefinder like this:
That would be the starting point. Once you had that working, you would need to set it up so there was as wide a field-of-view (FOV) for the camera as possible, then generate multiple beams with a beam-splitter or some other means; you could potentially use a mechanical scanner to scan a beam, and pulse the laser on/off at various points, tracking the angle of the shaft of the scanner so you knew which "string" was being generated, then the dot on the hand, picked up by the camera, could be figured out (distance) using the info in the above link...
Alternatively, one could steady-state the beam fan, then use one or more cameras and some vision software (like OpenCV), plus a ton of custom coding to locate the dot in 3-space, etc.
I know the above isn't what you wanted, but maybe it will give you or someone else some ideas on how such a system can be implemented...
