I am not surprised by this. It make good economical sense. The cheaper that they can make it the more likely that people will purchase this. As I have already stated before, Natal will not make a difference in this generation. Where it can have a very large impact is in the next generation. Right now MS is getting this out there so that gamers can get use to the controls and developers can get use to programming for the new control sceme. If that means that they have to sacrifice the graphics in the game somewhat to gain market potential they will.
And for those wondering, this will take significant resources from memory and the CPU's. Some games it won't matter on, but for some it will either meen less graphics or less FPS.
As a programmer I know how pattern and image recognition can be very CPU intensive and require a decent ammount of memory. I would expect this system to require a minimum of 16MB of memory to function on the 360 hardware and probably closer to 20MB of memory.
Not a ton of memory, and many games would not be a problem, but some of the very graphin intensive games would need all available memory.
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