I'll have to listen again but what I heard Koller say was not that Natal couldn't do z-axis motion detection but that its precision in z-axis motion detection is reduced the further you get from the camera. And he's claiming the Move knob gives better z-axis precision over a greater range of distance from the camera. I'd guess Move z-axis precision reduces with distance too, but perhaps significant loss of precision starts at a greater distance.
Still I don't think it's that much of an advantage because I reckon 99% of gamers will be playing within 3 metres of the camera which I bet has a more than adequate z-axis precision for the Natal. Sony needs to NOT try to out camera the higher tech camera. They need to focus on the benefits the Move has that don't exist on Natal which is the flexibility and immersion the handheld units provide.
“The fundamental cause of the trouble is that in the modern world the stupid are cocksure while the intelligent are full of doubt.” - Bertrand Russell
"When the power of love overcomes the love of power, the world will know peace."
Jimi Hendrix
