FWIW, my girlfriend doesn't like playing Wii and absolutely dislikes hardcore games, but she was blown away by kinect's demo videos--especially the dancing ones and said she'd definitely get a kinect if within her budget at some point.

Anecdote aside, Microsoft really has to open up the platform as much as possible and embrace developer inovations. If they do this, they'll finally take over the living room. I have a feeling the media center division needs to get out of the way almost entirely for this to happen, also.