What We Already Know:
At GDC, we heard that The Fight: Lights Out was to be a gritty fighting game using the PlayStation Move as its only input. Players would control their character simply by performing the desired movements with the Move controllers, one in each hand.
What We're Seeing Now:
And that's exactly what it is. Except now, it's in 3D -- only, it's still a third-person game, which seems like a missed opportunity. Players jab, uppercut, or just flail wildly and watch those motions reflected by the character. Well, most of the time. In practice, the game seemed awfully unresponsive, perhaps due to difficulties with calibrating the Move controller amid the bright lights of the show.
In any event, when working properly The Fight was pretty much what you'd expect: shadow-boxing, with in-game results. Jabs, roundhouses, and uppercuts are performed by mimicking those exact motions, while more complex moves like head-butts and headlocks are triggered by performing similar moves with the Move's triggers held down.
Of the Move games being shown, this seemed like it may be one of the earliest, so it doesn't seem unreasonable to expect a bit more precision and reliability before release. Or at least an attempt to render the action from a first-person view. Really, it seems like a no-brainer.