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An external CPU "upgrade"?... that's kinda laughable.

Natal will need its (high-performance) own processor, and a few megs of memory, yes. It will cost some money, for that reason.

It will not be able to "augment" the 360 outside of the image analysis and abstract input functions, however. Its not a "mid-life upgrade". It's an expensive accessory.  It's greatest value to MS was as a "look, 2009 won't completely suck because 2010 has this thing you think you're going to be able to afford and enjoy" presentation at E3 2009.  

Natal is the "any buzz" part of "Any buzz is good buzz".