I think the hype is mainly centered within the United States. I was amazed the media eat it like they did/do, while it was revealed the Milo demo was actually a fake and from the controller perspective not much new is being offered and there are real technical / usability concerns.
The driving demo pretending to hold a steering wheel does not seem much useable at all. It will tire your arms far too quickly and will certainly feel ackward and fake compared to holding a steering wheel.
The painting demo was unreal, the painting looked worse than found in kindergarten...
The hitting balls demo seemed like "seen that before" as well as laggy.
The gesture recognition interface, also "seen that before, but without the hype". I think the novelty in this will wear off soon for most people.
No, I don't think Natal will be "huge" on a worldwide scale. I think after the initial hype within the US, it will fade away slowly into the background there as well.
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