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As Squilliam said, Kinect is mainly a piece of software.  Software that will be upgraded regularly no doubt.  Sitting on a couch is a difficult problem solve as the furniture and person become mixed together in the depth map.  They will probably have to use a completely different solution than a skeletal system.  Which is another big thing with Kinect, MS could add completely unthought of functionality in an update.  Which is an interesting concept, as input devices are usually set in stone in their functionality once the hardware is complete.