It looks like great party fun, but I know I'll need a lot of challenge in the game for it to have real longevity for me. 
 
I know it's based on a series of move-sets and so far all I've seen in videos are the easiest settings where they get people acclimated to the game. I wonder if the Kinect would be able to keep up with a rapid series of move transitions and still score things accurately enough to satisfy a hardcore following. Part of what made Pump it up and DDR so fun is having challenges to overcome. It keeps you playing long long long after you're sick to death of hearing the same songs again.

You'll need to be able to break out top level soul train on expert 

See when I saw the title of this topic I thought of something completely different.
It won't get that hard I think.

" You'll need to be able to break out top level soul train on expert 

"

A lot of videos I see seem like they just use the same 5 or 10 moves over and over. I really hope there's more variety in the full game.

The more you beat the harder it gets.

There's around 10 songs that get pretty tricky or just downright difficult on hard, they definitely take practice. I'll point out some of the more notable ones off the top of my head. Even if you see the routine in a youtube video thinking it doesn't appear too difficult, try actually preforming something like the Quick Step properly and on time while stringing together the moves around it. 
 
 Audio Push - Teach Me How To Jerk: The notable move here is the Reject, a reverse-running man with arms crossed.  
  
Beastie Boys - Body Movin’: A Quick Step starting on the left foot gave me trouble. Heel Step hard to keep up with. 
 
Bell Biv Devoe - Poison: Insanely fun routine. A bit tricky to nail down but pretty darn easy after you do. 
 
Dirty Vegas - Days Go By: Extremely tricky. Very deliberate pace and features both a jumping move(Eagle) and a spin move. 
 
Eric B. & Rakim - Don't Sweat the Technique:Most difficult song in the game for me, hands down. Quick Steps, floor-dropping, Trick Steps. 
 
Snoop Dogg/Pharell - Drop It Like It's Hot: You must learn the moves or you'll be utterly lost. None of it seems like "real" dancing, but it's all rather complex. 
 
Technotronic - Pump Up The Jam: Song's nuts. Just watch.   
 
Young MC - Bust A Move: Same thing as with Drop It Like It's Hot, really. though it's easier and has enough simple moves that you won't be overwhelmed.  
 
Lady Gaga - Just Dance: What can I say, it's the last song in the list. 
 
Of course there's plenty of fun routines, just not all of them are all that difficult. Tricky moves are sprinkled all throughout the setlist, also.

Ive tried it. Get two people who have no clue what the dance moves are, put it on dance battle and both on hard. Super fun. It's tough because you really don't know the moves, but like rock band just takes time to learn them and its pretty forgiving.

I prefer the approach where I get somebody who has no clue what they're doing, and then I proceed to mop the floor with them in a dance battle.

I am sure it can get harder... it can get pretty hard.

I've got it for Christmas. Looooving this game.  
 
It's hard, but not too hard that you can't perfect them with practice, so it's just right. I'm pumped for the DLC. 
 
I think Harmonix have their work cut out for them on DC2. Game could really use some more features that spotlight where your mistakes were. A silhouette replay against a correct silhouette would be a huge help.  Really helps to have someone else in the room to give a second opinion on what the game is expecting of you.  
 
For anyone reading this thread because they have the same reservations that I had: The game is very accurate. I've found that everytime it says I'm making a mistake, it's because I'm actually making a mistake, not because it's having trouble reading my movements. 
 
With regards to Kinect as game controller, it lags slightly, but it reads accurately, so for a rhythm game it can simply compensate for lag and you can move naturally.. For action games however, you need to act just slightly ahead of time.