Everything about Kinect on PC is a bit underwhelming. I really don't want to wave at the thing a few inches from me, but I'd love to have it be able to track my eyeballs and be able to click or run macros via lifting fingers, blinking, or moving my jaw. We may be a year or two away from some really exotic UIs.
Kinect for media center looks pretty promising. I have a windows mediapc running windows 7 and am tempted to buy the PC version of the kinect just to control everything via gestures.
The Computer Vision field has certainly gotten far with head-tracking and object recognition.
With a bunch of relatively simple code, you can have a piece of software that tracks your jaw and blinking gestures with a cheap webcam and run whatever macros you choose.
I'm not sure about eyeball following, it depends on the camera's resolution and how much you train the program.
I have myself experimented with head-tracking to replace mouse-look in FPS games. It is very fun to try, save for an eventual headache in Quake 3's Q3DM17 :)
Now, these kinds of experiments are not for the average consumer, but they have been simplified so much over the last few years that the amount of excuses for not trying it out is decreasing.
afaik this was all rumors, nothing was ever confirmed
As I've seen Kinect analyzes 2D images, so you can still trick it to do minimal movements in games, allowing you to interact with an otherwise challenging game without breaking a sweat (except for jumping), while a sonar could model 3D objects more easily. So this could be an interesting alternative.