Question Concerning The Oculus Rift

From watching the news coverage, I'm not too clear on the head tracking piece. It seems like the head tracking controls in game head movement, which in games translates to entire body. Is this correct? If so, then if playing an FPS, is your cross-hair being controlled by your head tracking?

I imagine a game that truly supports the VR tech would disconnect head movement from player movement in the game, so that the head tracking only translates to moving your head in game, and that aiming, turning, etc would be accomplished by your more traditional controls. Is this not the case? If it is, then how does it deal with a game like BF3 where your gun comes up to your face to aim?

Very curious about this stuff, but most of the coverage I've seen is "this is amazing! OMG ... etc", and doesn't really go into great depth with how the head tracking works in relation to the rest of the controls.