uh, so I was right on the ball park when I said it was an advanced camera that captures at high frame rate at a good resolution with it being software driven for the most after all =_=; , and yes I'm aware that the zcam had IR sensing.
No, you are completely out of the ballpark. This simply cannot be done with a normal camera and requires very advanced hardware. Ignore the camera in Natal, it is only being used so you can see yourself. None of the tracking uses the camera at all, it is all done with the 3D depth sensor. If you hold an oject in front of a normal camera, it can't tell you how large or how far the object it. Natal is capable to tell how you far the object, how big it is, the shape, etc. It basically creates a 3D model of the object and detects its movements.
then you need at least 2 Natals to take advantage of the tech, front and back to at least capture the 3D movement more accurately across the board?
That would only be true if you had a 3D TV also. Since the TV is only displaying 1 side of you, natal only needs to capture you from the front. If you hide one arm behind your back, and the character on the screen also hides one arm behind his back, does it matter if it can't see you wiggling your fingers around?