Got my Kinect home last night and setup was a breeze. Took about 10 mins to get through the calibration and create a new offline profile for myself. I must admit it was very cool just controlling my avatar on the screen during this, not even playing a game.
Gave a couple of the Kinect Adventures a go, can definitely see the appeal there. Although not really for me long term, things like the taking of pictures at different moments will certainly cause some laughs. Then I gave the Fitness Evolved 'game' a try. This was a much more impressive demo of what it can do. Cool bio-metric type scans for height and width of various points which then help it correct your stances when (always!) you get them wrong. You can pause the game with the default gesture, or just leave the 'green zone' infront of the sensor and it'll halt the excersise. It then welcomes you back when it detects you again.
The other half came home and she setup her own profile with no problems, no prior XBox experience. I then jumped in with her and it ID'd me straight away.
All in all, I see a lot of pontential. Like many others have said it may take a while for the developers to exploit the technology better.