You really have to approach motion controlled games from a design perspective. Adding motion controls to most games doesn't always improve the game play (I'll opine that it rarely improves) and in some instances, can even hinder or worsen it.
But if you design a game initially around the interface, catering specifically to the input, the only limitations are the technology being used, the imagination of the designer, and the implementation by the developer.
While it sounds like MS is trying to market Natal as the future of Xbox, it really seems more practical for it to be a niche genre sub market at most. And while I hope their support is better than SCE's support for PSEye (which dropped off a cliff in 2008), making it their primary input device would probably be a big mistake.
That being said, if developers have good ideas they'd like to implement on the Xbox using motion controls, it will happen. How the public receives them will ultimately determine the viability of future projects, whether motion controls become a sub niche or accepted as mainstream within the Xbox user base.
I'm thinking the former, rather than the latter is more likely.
I expect to see a fair amount of XBLA motion control games either way.
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