Too much OLD thinking in regards to input. The system is a camera. A camera takes pictures(samples/instances) many times a second. Normally a CPU would handle this part, but Natal has a chip to do the following step. Differentiate between pictures. What this means is that any difference is considered motion. What does that mean. Thousands of bits of motion are capable. The second camera is used to determine degree of movement for depth. Ie 0bject farther away will move less between two compared images over 2 time samples.
So there is no technical limit to "number of players". It's more limited to physical space, distance from device and programmer design.
Squilliam: On Vgcharts its a commonly accepted practice to twist the bounds of plausibility in order to support your argument or agenda so I think its pretty cool that this gives me the precedent to say whatever I damn well please.