This product is in the WRONG market trying to get his into people's homes.
This should be in public places like arcades, malls, shopping centres where it has a huge advantage:
1) no controller interface works easily with anyone passing by and less problems of theft etc
2) short duration of fun and largely for impressing friends
3) can use more sophisticated and controlled setup for greater accuracy
4) This inherently has advantages beyond gaming for short "ATM" style interactions like say an automated hotel check-in system.
When people get home they want to RELAX and Natal is inevitably going to lose out in terms of "time sent" to online FPS games, RPGs and similar which people can spend as long as 4 hour sessions on.
Look, that Minority Report style setup was chosen for the film because it looked COOL but lets not kid ourselves that we'd much rather have a compact, precise and efficient setup. In real life it is easier just to select "Tea, Earl Grey" from a drop down list rather than try to spell it out to barely comprehending speech-to-text program.
Another problem I see with a lot of the Natal demos is all many of them are trying to do is imitate ordinary and attainable activities like smacking balls around. You can buy an ACTUAL ball and it will do a far better job than Natal since it isn't imitating real physics, it IS real!!!
The big appeal of video games is allowing the ordinary person to experience what is either too dangerous, expensive or unlikely/impossible to actually do. Like play a soldier, go on an adventure, race at high speed or explore tombs and dungeons and so on. I mean Natal may fundamentally be a poor imitation of various physical sports but on top of that it must allow you to do the impossible or fantastical.
Otherwise I might as well just buy a Frisbee for a fraction of the price and meet some friends in a local park.