Tim's talking about America's Army, which I blogged about earlier this year. If you're unfamiliar with it, it's a video game that doubles as a training environment for soldiers.
They saw another possibility with this, and I love the direction he's taking with it, where instead of blowing the bejeezus out of "enemy combatants," he's using the Unreal engine to create "Virtual Peace," which uses the same platform to create a 3D virtual environment where the players can practice R&D, natural disaster recovery, and negotiation.
Interestingly, the army has used games for this before, but they were text-based, and not as captivating as the shiny, exciting shoot-em-up counterparts. This project really capitalizes on the effectiveness of 3D game environment to train for the other (hopefully as important) side of military training. Supercool.