UPDATE: If you look closely at the Super Mario Galaxy trailer from E3 2007, you can see Mario's Boo form for a couple seconds. In case you missed it, here's the trailer again:
Apparently, in Super Mario Galaxy there will be high emphasis in transforming into other creatures. At E3 2007, we found out that Mario will be turning into a bee. And now, at GC 2007, we found out that Mario can turn into a boo. Yes, that's right a boo.
In past Mario games, such as Paper Mario, by using by Boo you could become transparent and go through walls and enemies. However, in Paper Mario you couldn't move while you were invisible. So, I'd bet this ability would be use in a very similar way in Super Mario Galaxy.
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