Update: Primesense spokesperson refused to comment on rumors. Calcalist speculates that the potential application for Primesense technology is Apple TV.
Update #2: AllThingsD adds its owns sources to the story:
"talks are “close” to complete, but are hung up on end-game issues like liquidity preferences," "the price could be slightly higher than reported, on the order of $20 million more," "the best that could happen, given the circumstances: A big strategic buyer at a decent price."