Kinect 1 already allowed to have a kid named Milo in your console who could do much cooler things.
Only problem was that he was very shy and only showed up in Microsoft trailers.
But seriously, it's a nice idea, but I wonder how useful it will be in practice. The exclusive Wired video for example (http://www.youtube.com/watch?v=Hi5kMNfgDS4) suggests that the system recognizes just about a handful of facial expressions like "happy" or "sad" and additionally tries to guess your pulse. The pulse guessing is indeed interesting, but not only is it questionable how accurate a pulse sensor relying only on vision will be, it's also questionable how much one's pulse actually changes while playing a video game. Will your pulse really go crazy just because you see a pixel monster on the screen?
I believe in practice it might be somewhat useful in sports/fitness/dance games, but little more.
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