And what I think is escaping most people about Kinect is that Microsoft requiring it for the use of the console doesn't mean they are going to force the thing down your throat in every single game that you might play, but simply that they want it to be a core part of the user experience of their next console.
I'm sure if it doesn't interest you any, you can by all means stick to exclusive use of the controller.
Even though there are certainly instances where it will be used for games, I think Kinect will mostly be used as a popular consumer device. Something that you use more often to control and navigate your way around your new Xbox and possibly even your television programming in cool or interesting ways than you are busy using it to play every game that gets released.
Kinect as a device guaranteed to be more widely adopted by consumers can be quite big and is something I can easily see catching on. Just because they require Kinect be connected for the console to work doesn't mean that it's purpose is to somehow allow Microsoft to spy on you in your boxers, or to somehow kill the use of controllers in our games. I can see it being used to instantly recognize and then sign in specific users, for example, without their having to go through a list to find their name and sign in. This would obviously be less necessary on a console where only a single person uses it, but I think you all get the idea. And I think it would be nice to instantly go to certain menus of interest by telling the Xbox to go to that specific menu rather than physically wading through a list of menu options before I get to what I'm actually interested in. Is this necessary? Probably not, but it would be nice.
My opinion is that with Kinect as part of the core experience you will see more developers use it in a more nuanced fashion for titles that aren't motion based. I can see it being used as extension of the traditional controller rather than an attempt as a replacement for most games. Head tracking for racing games, leaning around corners in FPSes or leaning in ring of a boxing or fighting game represents just a few examples that Kinect can bring to the 720.
Kinect as a peripheral used by a fraction of the 360 userbase has never encouraged a wide level of adoption in development or much investment for for the vast majority of titles that required Kinect. The Xbox HDD served as a way better example as how much utility an always there HDD offered a console versus the PS2's HDD add on.