I'll reserve judgement until I see this thing in action for real. Although the demo looks very cool.
Ultimately, this is a web cam (maybe 2 for 3D info) and I've seen those logitec web cam games in the past, and they were rather limited. Will the Xbox make good use of the technology?
MSR did show off some pretty cool cam demo in the past, though, so maybe...
But we all railed on the Nintendo & Sony for shoehorning in motion gameplay that don't really add to the enjoyment of the game.
Honestly, I'd hate to play Halo with this thing because that would mean I'd be exhausted by the end of the game.
Who knows, maybe for short, casual games?
I'm actually thinking more for applications if it runs on XNA/Windows. I'd love Minority Report-style navigation of photos or Outlook emails or being able to (reliably) give voice commands to control your PC without training.