I really like the idea of this. It looks amazing in the video. Also I don't think its worth worrying about odd shaped rooms and objects in the room affecting it. It seems to scan the room and use the information gained to project an image that compensates for the shape of the room and projects an image that looks correct from the players point of view. That's what the grid at the start is for.
Also its worth noting the Xbox 360 under the TV. They are running it on current hardware with some sort of additional hardware which can be seen to the right of the Xbox. I'd stab a guess at this being a wireless sender which would send the signal to the projector behind the player. This would circumvent the problem with trailing wires that have been mentioned in previous comments. I'm also assuming that the projector will have a 2nd kinect device built into it, so that when the grid is projected into the room it would use the main Kinect sensor to scan the players position and the walls to the sides of the player, and the sensor built in the projector to scan the position of objects around the TV that are out of the view of the main Kinect sensor. It would then correlate the information together (by matching the grid locations from both sensors) in order to project a perfectly placed image.
Obviously this is all just educated guesswork but it seems to make sense. I don't think they'll be releasing it for Xbox 360 though. I think they used that simply because they didn't want to give away any info about the new console.