I dont see that critical acclaim. The only thing it gets so far is marketing hype and expectations about the potential of the hardware.
Well, we also hear occasional developer praises and skeptisms, which could mean the system works marvelously within some bounds.
The software is any app or game that exploits the available hardware. And that can be either from MS or some other company.
Removing Natal's ability to detect depth, all you are left with is simply any camera and a microphone. And that alone wouldnt have made people excited about the potential.
You may be right earlier on to say that many of Milo's capabilities can be done without depth perception, but MS will find applications to emphasize Natal's unique features (e.g., already mentioned Xbox Live users teaching Milo collectively, recognizing 3D objects).
Even though speech recognition may not be 100% reliable, the fact that every 360 comes with a headset will allow developers to experiment with interesting features. The hardcore part of their presentation may still have controllers like the traditional 360 controller pad, headset, 3D glasses, etc. augmented by natural interfaces.
Afterall, no one has demanded that the traditional pad should be replaced by a wand. Sony is taking a big risk trying to introduce the wand directly for core gaming (See Socom 4). Unless there are concrete and evident improvements, it is very likely to end up like SIXAXIS (See Lair).
The casual part of MS's presentation may rely solely on controller-free gaming. For some games, these people may not need high specifications. The excitement may come from seeing refreshing applications for casuals, especially female gamers, young and old.
Most US consumers may not have seen "old" tricks like the EyePet's sketch recognition, sing-along, or even EyeToy motion games. If MS can get all of them working (even partially), their massive marketing effort is going to grab a bigger mindshare than Sony.
I also think that a lot can be done to simplify game UI today.
I'd say if the 3 vendors can usher more people into the gaming industry, it should be a win-win for all of us.
EDIT:
http://xbox360.ign.com/articles/109/1095582p1.html
We already knew that Fable III would be at the show, but this comes as the first confirmation of sorts that Milo will make another appearance. Milo, a game where you interact with a virtual boy via Project Natal, was unveiled at E3 of 2009 but has not been heard from since.