Microsoft's final reaction is to declare that they
will not sue or try to stop anyone who wants to modify or expand the Kinect's behaviour (incorrectly referred to as
hacking, by the way.)
That's the wise thing to do, as it essentially crowdsources research and development. After all, one of the people behind the Kinect, Johnny Chung Lee, entered the project when Microsoft snatched him up after seeing the very smart stuff
he did with the Wiimote when he was still a student.