It doesn't change the fact that Kinect is evolutionary technology.
To innovate is to do something nobody has ever done before, down to the fundamentals. Kinect doesn't do that. I'm not trying to downplay Kinect when I say this, as the Kinect hacks are pretty damn impressive, but Kinect isn't innovative, especially to the point of calling Microsoft the most innovative company. It's called a refinement.
Just like Gears of War. It refined the cover system concept from kill.switch and this other game, I forgot its name.
Or like LBP...or Heavy Rain (which is a hybrid between Dragon's Lair and point and click adventure games on the PC).
With that said, people aren't giving Microsoft enough credit, as Microsoft actually scrapped the earlier depth sensor device in favor of a cheaper device from PrimeSense (I think), and it's the software that Microsoft developed for it which does most of the work.
Rockstar: Announce Bully 2 already and make gamers proud!
Kojima: Come out with Project S already!