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Pjams said:

Sounds very cool, are people actually using it as a develoment tool? Sounds like a cheap and easy solution for testing to be used in conjunction with mocap

It's more in the software than the hardware, but the accessibility and low cost of the sensors make it an easy choice for software development outside of commercial games. 

While there are far more toy like homebrew programs that have been developed this way, the one I've used (iPi Soft) is a commercial application that can be used to produce professional level motion capture results. It has a fair amount of limitations, but even working within those, for less than $1,000 (over the cost of a PC with production level 3D software) you can have the software and hardware necessary to create quick motion capture for import into Motion Builder or Maya to clean up and turn into game character animation. 

But most of the Kinect software development outside of game applications has been experimental, prototypes, gadgets, etc. I'd say most people writing code are using it as more of a toy, but there are other uses for Kinect and the SDK MS is distributing.