I had a go at the Kinect Adventures that comes with the sensor last night, and it seems good. Didn't notice any real lag to speak of, and the raft down the rapids was fun. Put away until next month now, but at least it's all set up for when it does come out again. The zone for two players was slightly further from the sensor, so I may move the sofa (elsewhere in room) for a bit more space.
The lag is just relative between the games. For some reason the menus, navigating are quite crisp and snappy on some games and (mostly on the menus) quite lethargic and confused in others. In game is less pronounced.