I'm sure this has ocurred to a lot of people already, and not just the ones wearing tinfoil hats.
And a lot of the issues raised are kind of common sense calls. If you're stupid enough to do something blatantly illegal for example, while your face recognizing, voice recognizing, body recognizing camera is live, and you are logged into your account you pretty much deserve to be arrested.
While I don't see the Pot Police kicking down Kinect players' doors anytime soon, people should probably refrain from passing the dutchie on the left hand side while tripping out to the visuals of Child of Eden.
Conversely, if you're working on some world changing billion dollar idea, you probably don't want to do it in a room with a surveillance camera.
Kinect is for games. If you're not playing, and you have concerns about privacy; unplug it.