Kinect: is basically an optical sensor so it requires line of sight. It utilizes computer vision and a 3d depth map (generated by using an IR projector and receiver) to make an educated guess as to your bodies orientation. Line of sight (needs to see you), Field of View (need to be within range), Body orientation (need to look humanoid, i.e. upright with 2 arms and legs), movement speed (not faster than the optical sensor or IR projector), clothing (not too baggy), lighting (low IR), etc, can all effect the (limited) accuracy of the kinect.

PrioVR: A system like this provides accurate positioning of all necessary joints in your body to form a true 3d representation of your skeletal orientation without any of the optical limitations or guesswork of the kinect. You could also use it outside, walking down the street, with a laptop in a backpack. i.e. it could be used for augmented reality in any situation.

In the future, I would expect a HMD (some kind of visor - an oculus with a camera in the short-term maybe), a full body suit (like this), and some gloves (the next project these guys will be working on) to be how we augment reality. I don't think we can let this opportunity slide, which is why i'm being so vocal about it!