I'm fine with something like this as long as they don't force intrusive ads on us every chance they get like Google does. As long as the ads are relevant and not a nuisance, this shouldn't be a problem.

On a different note, I can already see the Big Brother references and memes that stem from Kinect gathering data on you.

Its fine.....I mean id rather see an ad for something I might buy then something I would never buy

yeap (advertising and mktg research degree here) I agree I'd rather have targeted ads relevant to me more than random ads.... and data collected I think it won't be video feed or sound data... that would be way too much to analyze or to collect... maybe a list of regular voice commands... or trends... do you tend to watch sport right after a gaming session or do you go in chat after a movie... what kind of apps you use.... are you alone or in groups when you watch Netflix.... video and sound feed are pretty irrelevant actually.... it's the rest of the data that is interesting... which corner you look at the most, what type of movies you watch....

but before screaming against MS you do realize every service you use does the same.... why do you think procter&gamble is one of the biggest marketing research moguls in the world.... you've been spied upon your consumer habits for over a century, nothing new here just the methods... and those are actually way less intrusive than they ever have been, more secure in terms of anonymity and result in more relevant content for us and most of the time less intrusive....
you guys remember when spam came in pounds over pounds of unwanted paper mail that you had to be careful not to throw your bills away in the process of trashing them....???

nah it has never been better for us and for them than in todays ecosystem

The way the OP make it sound it's like the Boogey Man is listening to everything you say and to to go get you in your sleep.
XBL live are passive ads and they're not intrusive.