No modification to hardware or software equals no hack in Microsoft's book.
Despite what you might have heard, Kinect has not been hacked, at least, not by Microsoft's definition anyway. The company is splitting hairs over what actually constitutes a "hack," saying that a recent video - seen to the right - showing Kinect working on a computer doesn't cut the mustard.
Kinect's launch in the US prompted a challenge from Adafruit Industries, who offered a $1,000 bounty for the first person to get the sensor to output video and distance information to something other than an Xbox 360. When Adafruits learned of Microsoft's displeasure at the contest, it upped the prize to $2,000, and threatened to take it ever higher. Whether motivated by money, the desire to tweak Microsoft's nose, to even just by the challenge of it, it only took a few days before someone got Kinect working with Windows.
Microsoft has responded to the news by saying that getting Kinect to work with other devices isn't really a hack, because there was no modification to Kinect's hardware or software. It also reiterated that the use of Kinect with a PC or any other device was unsupported, and for the best experience, people should use Kinect the way it was intended.
This hack, or whatever Microsoft wants to call it, could lead to interesting things in the future. People could build robots that can recognize people's faces and voices, for example, or homebrew PC games that make use of the sensor. But whatever happens, it seems likely that there's not much Microsoft can do to stop it, or else it would have done it already.