I wouldn't imagine full-body motion would be a basis for an entire system/control interface, either.
After all, Nintendo is all for MORE accessable control and gameplay. Little kids wouldn't have the same ability to swing Link's sword as more mature people with longer/faster arms - that much alone would dissuade Nintendo from such a system.
As such, although I do believe that the Revolution controller will incorporate limited bodily motion as some form of control, I think we can rule out any full-fledged bodily control of the sort that would actually allow you to puppeteer the action on-screen. And I doubt that the upcoming Zelda will be forward-compatible with new Revolution features, seeing as the Revolution probably won't be finalized by the time Zelda comes out.
As for Revolution Zelda... well, to use a generic example, say the bodily control is in the form of an xy tilt-'n-tumble plane - tilt forward, back, left, right. The whole idea is to enhance the intuitiveness of control. So I picture it being used in place of an analog stick - probably as the main motion control device. I would assume both Gamecube analog sticks would remain present on the controller for the sake of compatibility - and having 3 analog controls accessible at one time would be useful (5 if you count the shoulders).
In addition to the tilt-'n-tumble sensor, another cool thing would be a torque sensor

(a little more far-fetched). Basically, any semi-rapid motion twisting the controller left or right would register as an analog input (by the rapiditidy of said motion). Zelda usage: camera swing. Want to see left, twist quickly to the left and you get a quick camera swing - unfortunately, this presents various problems of it's own. Hey, this is fun - conjecture is an enjoyable pastime.
Or maybe there's just a gyroscope right in the middle of the controller - not only does it stabilize the controller so that it's easier to keep it in an upright position without accidentally tilting it, but it provides a mechanism for force feedback. Has this been suggested yet? It can offer varying resistance to tilting the controller - a classic example would be in a racing minigame, trying to turn the wheel, the farther it goes, the harder it is. In a fishing minigame, when you're casting, the resistance goes down so the cast feels faster - when you're reeling in, resistance goes up, as you're fighting the fish. Obviously, it's not going to actually stop you from turning it, but it gives you an intuitive cue of tension and resistance in the on-screen physical action.
In Zelda, during horse-riding, the resistance would increase when you try to "rein back", whereas there would be little resistance to tilting the controller forward. All controlled by the speed of the gyroscope, which would have to be very light for its speed to be able to be changed in a small fraction of a second. In battle, when you receive a hit from a moblin sword, resistance goes up exponentially to any direction but back, away from the screen, until you recover - this lets you "feel" the impact of the hit, and the direction of the character's motion.