Microsoft has proved their support of the "backyard" modding community today. News has just come out that the company will release the Kinect SDK for personal use this March. It will initially only be for non-commercial use. A follow-up commercial SDK has been outed as launching "later", possibly this Fall.
This news will greatly lower the barrier to entry for Kinect hobbyists, which is exactly what Microsoft wants. This is new technology, and fans who, say integrate the Kinect with a Flash-based interface represent (to Microsoft) useful feedback on possible future features.
Craig Mundie, Microsoft chief research and strategy officer, said that he expects a "huge explosion" in interest. It looks like their unreasonably reasonable reaction to Windows Phone 7 hackers was just the outer edge of a company-wide trend. Now, how much longer do we have to wait for Kinect for Windows?