Quite cool. Seems a little awkward to be just waving your arms about though. Have you looked into anything else? See for example
this Youtube video, which shows a hybrid control solution, with a Xbox controller combined with the Kinect in a FPS-like environment. He seems a little stiff at the beginning, but watch towards the end; he becomes a lot more natural with his movements and it looks quite fluid.
Also, does anyone know if you can embed youtube videos in posts? That'd be really cool.