The Xbox 360 Kinect is a $150 device that connects to your Xbox 360 and allows you to play games and control system features with motion. The concept is similar to the Wii or PlayStation Move -- if you're familiar with either of those -- but instead of using a hand-held controller your body is the controller.
Kinect for Xbox 360 allows you to use your body, face and voice to control your Xbox 360. This means instead of hunting for the remote when you're watching a movie on your Xbox 360 you can simply use a hand gesture to pause it. Similarly when you are playing games you can use your body as the controller -- moving, jumping, punching, waving kicking and more.
The Kinect accessory is expensive as far as accessories go, but in line with what you might pay for a game that needs accessories like Rock Band. Right now there aren't many games that use the Kinect as the main controller, especially when compared to all the movement based games on the Wii, but the Kinect is $50 cheaper than a new Wii and could be a good way to extend the life, and fun, of your Xbox 360 without buying a new console.
Engadget has posted a full review of the Xbox 360 Kinect, including the video embedded above, which will give you a better idea of how the system handles in real life. One of the biggest takeaways from the review is that you will need a lot of room to use Kinect so you may want to take a look at your living room before you buy.