If Microsoft knows what's good for their profit margins they won't try and gear this towards the more interactive and maneuvering games like Assassin's Creed. There's a lot of actions in those games that require too much movement for the sensor to pick up (at least, this is what I foresee...) and the frustration level with skyrocket. If you're looking for immersion, it's going to be pretty darn hard while your limbs are flailing about like they're on fire. However, if you're looking for something that will combine gaming and movement (such as the wiifit) or if you're having a party and you'd like to challenge your friend to a game of "hit the mosquitoes" then it's going to be very popular.
Different gamers have different attractions. Some like the Xbox while others enjoy the PS3. Some will take PC over console or joystick over gamepad. As long as there's diversity in the world of gaming (which frankly, is a HUUUUUGE part of the industry) there's going to be new innovations. After Natal we'll eventually move on to virtual reality and touchpads or something. In my eyes, Natal boils down to just another step in gaming evolution, and apparently game evolution wants to slowly weed out the humans unlucky enough to be in the path of a flapping appendage of another gamer.
Bottom line is though, we won't know if something like Natal is a yay or nay until it's worldwide, immersion factor or not.