Defintiely an RTS, where the camera tracks your hand and displays a Diablo-like hand cursor on the screen. You "grab" unit and then "place" it (open your hand) where you want it to go. It it can do multiple hands you could get crazy fast. Also, for hot keys, the side of the screen could have a customizable interface with virtual buttons on it (like an iPhone game) and you "grab" at them to activate.
Also, Myst or any point and click adventure would work with the virtual "hand", you really need that though for something like this.
There is a snowball fight game in Wii Fit where you are behind a protector and lean out to throw the snowballs and lean back in to hide, you could even add the throwing motion with Natal.
Yes a virtual keyboard would work just fine, which will be great for sending messages and typing in names of characters in RPG's.
Using a character generator in Mass Effect would be easier because you could more precisely place the eyes, nose and other facial features.