Title really.
 
Does it track your movements, or are you just hitting promts to hit. 
 
Thanks.

Looking at videos of it in action - I would say the latter.  I suspect Kinnect Sports Boxing actually tracks better given it uses your avatar and thus microsofts tracking code.  Plus on the giant bomb video, the dude playing couldn't get a headbutt to register, and when he does a spinning backfist - the player doesn't need to actually spin.
 
Dissapointing in the extreme.

No, it is not based on prompts.  Yes, it does track your movement, but not 1:1. 
 
Think of it more like an extension of gesture controls.  You perform an action to trigger a canned animation/attack.  You can't simply hop in and start fighting however you like - you're making specific movements to trigger specific in-game actions.  
 
Sometimes it's fairly obvious and seems like 1:1 (like a straight punch).  Other times it's things like placing one foot behind another and leaning forward to do a roundhouse kick.  It also means you have to learn all the possible moves, just like you would for a character in Street Fighter.