Well, in that concept video it looks you can have soft conversation with Milo, but we know this kind of video always lies. 

I doubt even that level will achieved. We're talking Peter Molyneux here.

Uh, dreamcast was doing these sorts of canned responses years ago in Seaman, this is just adding a little basic motion recognition. There's nothing in the video that can't be done on todays consoles without a microphone and Vision camera/Eyetoy.

What concept video??

I think it is a fun idea but it brings back terrible memories of seaman for the dreamcast.....

this.

i hear the person that they got to do that had to be trained, and it only responds to limited specific motions and certain expressions

Yes Peter M is very smart and makes some of my favorite games. People just have too much high exspectations. Milo will be cool yet weird.