My honest interpretation: The "demo" appears to have no grip on what people are wanting to see. They are showing us the wrong thing. They want to say "hey, look, see these people using Kinect and how much fun they are having!" Which is true, the people do look like they are having fun at whatever it is they are trying to do... But from the outside looking in, it appears they aren't doing anything much useful. There appears to be no skill involved in what they are doing and in fact, the adults appears to just flail hoping to meet the objective and the children just appear to mimic the adults. I have to ask, how fun is that tomorrow? Remembering back to my days of purchasing a webcam, it came with software much like what we see in this demo. It was sort of like handball but you held up your hand or an object (a pencil, stick or whatever) where the cam could "see" it and you "hit" the ball as it approached the screen from some distant blank wall. I remember taking my hand and moving it violently in front of the screen and successfully hitting the ball each time it approached. Did I have fun? For about 5 minutes. Did I play the game after those 5 minutes? Not even once.
What the demo should have shown is something that's skill related and requires a little bit of talent. Boxing comes to mind. Ducking jabs, landing a right hook, moving around the room and timing your attacks. That would have held so much more value in a demonstration.
If they really wanted to include multiple people playing at once then a demo that showed something similar to Halo where one person could drive a vehicle and the other would man a gun turret on top. An added effect would be leaning your body (as the gunner) to deter the "inertia" of the turns. Lean into the turn to keep your gun aimed in the right direction just like you'd have to do in reality. Your body pushed to one side or the other doesn't offer very reliable aim.
Overall, add skill and movement that appears to be actually playing a game and remove the "look at me spazzing in front of the motion sensor" effect just to say "look at these people having a good time."