In addition to just ironing out any little bugs that are in the software.

#1 Get Kinect working with other dashboard apps particularly Netflix.  This has to be a very high priority and Hulu support needs to launch with Kinect support.

#2 Launch marketing was directly tailored to people that believe Xbox is core only. Now start showing more core oriented games and hybrids.  Article on 1up. http://www.1up.com/news/hybrid-kinect-controller-games-development. I for one think that prop like devices wont dilute the message.  A Kinect gun for shooters would be fine and doesnt change the message.

#3 Take the technology to beyond Xbox 360. I am switching to U-Verse from DirectV now that our 360s can be used as receivers.  This uses MS Mediaroom software. They need that to support Kinect ASAP.  Looks like it is in the works. http://www.variety.com/article/VR1118026396?refCatId=1009

 One advantage remote have over this is I don't have to have X360 on 24/7 while a remote is in "off" state until you push a button. Pushing a button is so simple a caveman can do it so do we really need a replacement for the remote?

  Even so it would seem to be more useful if the "Kinect" was actually build-in the device itself just like the remote eye in build into your TV.

#4.   Just throw kinect in the trash and instead focus on a product that can live up to the hype, can perform well with more than a few titles, and will bring a long term profit to MS.