of course Natal will work, Microsoft will never release a product that has an underlaying manucfacturing fault now will they?, ZING!.
Sorry i'll stop that, yes natal can work, it can work incredibly well. But wether it can convince someone its easy enough to use that they buy it for their grandma like people do with nintendo products such as brain training then it may not win.
It'll recoup the money Microsoft has spent on the technology, which in theory is good enough, but its not as good as outright number 1 and most profitable game department which is what they are aiming for.