You're mention of Dance Central completely overturns this POV! You can't play Dance Central with KB+M. Even if you mapped the potential moves to keyboard shortcuts, you'd lose the fun of the title. The virtual puppeteering is a unique aspect to Kinect and where it's strength lies, not in a motion based traditional interface. I'd love Kinect with LBP2 to record better virtual actors. I don't think camera based tech can manage it, after trying the Kung Fu Live demo last night. It favoured a white door over me, and a shadowy corner being removed from the background meant a null zone where I couldn't go. It's difficult to see where stereoscopic cameras could be used for 3D when they will have the same contrast issues and be unable to track low contrast overlaps. Two cameras seeing virtual the same image will have the same sort of troubles.
Then again, given stereoscopic vision you could pick a distanct and align the two images to that distance. You'd then get a sharp image at that distance and the rest would be ghosted. Selecting from the resultant image by sharpness should provide distance-based isolation.
Do really Dance Central and KungFu Live be comparable ?
Ok, they look to be the same input scheme : moving in front of a camera !
But that's it ! One game let the player puppetmaster an avatar in an action game, the other game swap the puppetmaster role between the player and avatar.
Dance Central do show a virtual dancer, and the real player (the puppet in this case) have to match his moves, Kinect device just doing 'match or not matching move' in the time frame defined. Am I the only one who understand that in front of Dance Central, if I do my own dance moves, the virtual dancer ingame do not copy my moves ? Ar am I totally wrong on this one ?
KungFu live, on the other hand let the real player puppet-master his video-captured avatar. This does imply a totally other way to manage the video feed and input commands the player want to echo ingame than Dance Central !
For the moment, this system has not been seen in any Kinect game. Of course, the dual capture system that Kinect/Primesense is powered should solve easily the problem you encountered in the KungFu live demo, as the system detect the gamer with the depth camera, and should be able to copy/paste a 3d capture of the player ingame with almost no false positif player detection.
I do not want to defend KungFu Live, as it is a tiring game, physically, and really limited gameplay system. Kick you enemy, slap them, punch them... Board, a game pad with 3 buttons was giving use more moves with less pain...
I do not critic Microsoft idea of hand free gaming, I blame the poor input scheme we get for the moment with all the camera/optical capture devices available.