That's not how Dance Central works though. As I said, it reads your moves in tandem with the person on the screen, no lag at all. This is apparent because it gives you the score of "Flawless, Nice, etc" immediately at the end of the move sequence. It wouldn't be able to do that if it was processing the input and scoring the points after you did the move.
The delay is only when it takes the input and has to build the visual representation and then display it. That's why some avatar based games like Reflex Ridge and Rallyball show more lag than Dance Central, 20,000 leaks, River Rush, and Space Pop.
And as always, Kinect is not limited by its hardware. The software behind the device will keep improving and so will the response time as a result. That and the way the developers choose to use and process the data will also show varying differences in lag from game to game, with some being perfectly acceptable around the 100ms range, and some being closer to 200-300ms.
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