of course that could happen but for the vast vast majority of people who are going to buy that thing that's not who's going to be invading their privacy. The govt simply isn't going to be trolling around 18-24 year olds Kinect feeds unless they have a reason or there's some way to program the Kinect to detect certain images or sounds that would be of interest to them. The people who are going to abuse the Kinect the most is Microsoft themselves, they're going to be selling your biometric data the Kinect collects. Camera's like the Kinect are already being put in at major retail stores in big cities. They want to see thermal imaging of your face as you peruse their products. I'm not against the technology in that setting, if a little increase in facial temperature tells them the product is getting attention...fine I guess. But keep the shit out of the fucking livingroom.
I don't play enough to feel the need to rush out and buy one. I'll give it a few months and see what the nerds say. I hate the thought of buying a PS tho. Always been an Xbox guy.