I thought it looked great. I like the one box solution. I'd love to see them take it further by creating a home automation protocol that would allow 3rd parties to build devices that can be controlled through the Kinnect's voice recognition.
Addressing the negative points raised so far:
Graphics on release titles never demonstrate a next-gen system's capabilities. It takes a year or two of refining graphic libraries before developers harness the power of new systems.
Sure, Kinnect is kind of creepy, but it's a simple fix for the paranoid. Cover the cameras or disconnect the cable when you're not using your Xbox.
We'll have to see on the used game thing, but it wouldn't bother me personally. I tend to buy older, cheap games through Live and rarely buy games on disc anymore. (too lazy to get up and change the disc)