I think it was just part of the show. In any case, it shows that Kinect can handle people jumping in and joining all of a sudden without screwing anything up.

I thought it was obvious those two people in the back were just dancing along to be dancing along.  They were not affecting the game.

People have gotten to play the game at E3.  Read what they have to say about it.

it's still amazing that Kinect can mesure your body this accurate and it's not something that can't be fixed - they can simply make you enter your height and weight manually during profile creation. yeah it wouldn't be as awesome as Kinects detecting it but it's a small problem that can be fixed easily.

I ddint notice that much lag, not enough to be a problem. So though I would buy a Kinect, I still wouldnt if the price is the rumoured $149. It would need to be almost half that, or $100 max.

Everyone I've shown it to has been blown away. I'm surely going to get it myself with maybe 2 or 3 games. The lag can probably be fixed ala calibration to your television like in Rockband.

also what ruined it was half of the show was pre recorded

if they wanted to sell it show us it working!!!

It can only be fixed to a certain degree, there are actual physics involved that determine how fast light reaches the camera, gets processed, gets sent back to the TV, gets processed by the TV, is picked up by your eye etc.   However that lag exists with controllers as well.  In one article I read the latency in Killzone 2, for example, was 150ms from the time you pressed a button on the controller to the time the character on screen did the action.  Although some people complained about the "sluggish" controls in Killzone 2 it was hardly unplayable....and that's an FPS.  It's also very close to the lag time you're seeing with Kinect.

We also saw excellent examples of the 2 ways you can use Kinect.  With Your Shape what you were seeing was a 1:1 representation of what you're actually doing.  In that case the latency is more noticable.  In the second case you have Dance Central which takes a different approach.   The avatar on screen is performing set animations and all the game is doing is rating how well you mimic those actions.  In that case you're probably not going to notice any lag at all because the game is only scoring you AFTER the movement has happened.

I really curious to hear more feedback from the people at at the show who actually play the games.

That was at the Cirque du Soleil show, it was just an event to get people hyped, the demonstration of the tech was yesterday and it was live.  Get over it already.