Kinect has infinite potential, I encourage everyone to check out videos on youtube of people using the kinect in very different creative ways.
This is the first video I ever saw of the kinect being used outside the xbox 360,
http://www.youtube.com/watch?v=TlRSNxryINs
This was the first of its kind at the time, it involved mirroring the person's movements through the kinect to a ragdoll in an environment similar to gears of war(through UDK of course). I am planning to take this to the next level, doing things like walking around naturally, knocking stuff over, replicating gun wielding motions to shoot enemies, and of course driving!!
There is TONS of other videos on youtube, one of them even involves a person rendering angel wings in real time to his back
EDIT: I DID NOT know garry's mod had kinect support :P thanks for the link, I bought it off steam a few weeks ago and this should make a perfect game even better.