Surprised after so many posts, I'll be the first to point this out. Any video featuring girls in bikinis attempting to demo something always turns out bad. Be it Kinect or girls shooting guns, it often ends up with it failing.
I don't know that I can say I've seen a realistic demo of this equipment. Nobody lives on a stage or has a few dozen people or more flashing cameras at them while they try the device, and at least from this video they weren't even following the on-screen prompts to move (maybe because they don't understand english, but that's a minor point). MS never said this technology was absolutely ready to go, so I'll make an exception this time for bugs in the system. Nothing is ever going to work perfectly, as even non-motion controllers are liable to do from time to time.
I'm getting too old to even think about trying any sort of motion control, but there is promise in the technology for there to be a return on the investment. Look at the unlimited amount of lousy games out there that people buy all the time and often the developers at least make their money back on it. If people don't invest in Kinect, then it is highly unlikely that MS will put more money back into it in order to finish eliminating the bugs, similar as to what happened with the Virtual Boy. There are already what, four different versions of the DS and they all basically do the same thing. It isn't worth investing more time and research into it if no one is going to buy it, so if no one buys the thing and they don't get any pre-orders for the device, MS will just chalk this up as a bad idea and dump it and we'll only read about it on Wikipedia in a few years as a technological failure. I'm not saying everyone should buy one, but I'm fairly confident that enough people will buy one to keep it around for at least a year.
And I prefer real-life demos of products over staged commercials that have been corrected to show off how something is SUPPOSED to work, regardless of the reality of the situation. I'd like to see more examples of the technology both before and after it is released to get a better gauge on whether they improved the design or just boxed the thing up and shipped it out as it currently is. And no MS, don't count on getting another $150 out of me either way.