The Kinect for the Xbox 360 has turned out to be one very hackable device and the thing has turned up for many more uses than I expected. We know that right now the resolution of the cameras inside the device is set at 320 x 240. Apparently the gear inside is capable of a resolution of 640 x 480.
Microsoft capped the resolution of the sensor to allow multiple USB devices to work at one time. However, Joystiq reports that engineers at Microsoft are working on a fix that will allow the use of multiple USB devices and allow the Kinect to take advantage of its full resolution.
The catch to allowing the resolution to increase could include uncertainty offer how much more accurate the camera sensor could be at higher resolution and if processing more pixels will slow things down. The Kinect sensor is limited to 15MB/s of data now and unlocking the sensor would allow 35MB/s of data processing.