"Natal does not track players by colour (although we know from Milo commenting on my blue shirt that it can if it wants to); it tracks them by infra-red "
Gah! Willful, unthinking ignorance like this really yanks my chain. When you get things like this wrong it makes me want to ignore you completely, because you're probably an idiot. There are several mistakes like this in that article, and the continual invoking of "magic" is particularly bad. There is quite a fair bit known about how Natal works. If you somehow missed it at E3, look it up slacker! If you really want to persuade people, sound like you were paying attention at E3 for chrissake.
As for addressing the claim that hardcore gamers don't want to jump around in front of their couch rather than sitting on it and twiddling their thumbs...
There's something truly awesome about sitting back, taking a piece of clunky plastic in your hands, and gaming the night away with some good ol' fashioned haptic feedback. Maybe Natal is precise enough to read your finger positions without needing a controller, but it still can't give you tactile feedback. Incidentally, spinning your hands in the air to control a car is actually a step further away from total immersion as compared to spinning a steering wheel in the air, because real cars have steering wheels!
Don't get me wrong. Natal is still an epic achievement, but hardcore gamers should probably realize it's more for their mothers than them. Take a look at the Wii. It's sort of a gimmick. A lot of people get one, play it for a couple months, and then pull it out only for parties. Why just parties? For one thing, it has a lot of games that are easy to learn and offer little advantage to the master, meaning almost anyone can win by the end of a session. It's also fundamentally enjoyable watching people spaz out in front of the thing before they realize it's all in the wrist. Given the Wii's relative lack of depth, why has it outsold the PS3 and Xbox360 combined several times over? Broad appeal. Your mom doesn't see the point of yet another game about saving Master Chief's undies from alien zombies, but air-golfing? Score.
Look at how MS operates and you'll figure out what's going on here pretty quick. Natal isn't the next generation of hardcore gaming. It's the Internet explorer of casual gaming come to dethrone Nintendo's Netscape. The Wii showed Sony and MS how monolithically massive the casual gaming market is, and now they want in. Natal is a slash aimed squarely at Nintendo's jugular, and they're going to have to innovate our pants off and then fellate us to stay in business.
So, will Natal ever do anything for hardcore gaming? I don't know. Natal, or something like it, will someday. It really is in the hands of the software developers though. I applaud MS for giving us a whole new bag of tricks, but I honestly don't expect a hardcore gaming Nirvana to come out of the mist like the author of that article does. I expect Wii-type gimmicky crap that will be a whole lot of fun at parties, and for your mom, but not that fantastic for late night fragging. Emotional AI and speech recognition is bloody impressive, but Turing test passing AI is still very bloody hard stuff. They can put this stuff into games, but at some point you'll probably feel like you're trapped in a world full of Dr.Sbaitso's. Scripted dialogue trees (Mass effect is a great example of doing those well) aren't going to go away for quite some time. In reality, the tools MS is giving us will take years or decades to refine on the software side of things. Existing input methods, like mice or gamepads, have been around for several decades and are heavily optimized. They're not going to be replaced in one generation.