Reviews seem to be very positive or very negative among people who actually have used this.
In my case, it doesn't work. Games that are doing very coarse body tracking (the sports games, I noticed, are fine) seem to work relatively well. You do get to play in less space.
That said, this dramatically impacts fine-grained tracking. Apps that are very sensitive to your position (Leedmees, for example) are basically useless with it, because your skeleton skips all over the place. Menus become very hard to navigate because hand tracking is very inconsistent. The hand pointer slides off the button targets. The fish-eye effect also causes people who are standing off-center to be seen by the Kinect as standing at an angle -- something that appears to mess up games like Dance Central.
Another problem, with games that involve moving front-to-back -- the Kinect is calibrated to know how the appearance of your body changes as you move forwards and backwards, and adjust that so it knows how far away you are. Because of the fish-eye effect with this, it sees your front-back motion as being exagerated the closer you are to the TV, which will impact games that work along that axis.
I also suspect, but got tired trying to determine for sure, that it really causes issues if you have a low ceiling.
Re-calibration didn't help, particularly with the hand tracking problem.
If you have a lot of problems with space, maybe $30 is worth it as an experiment, but (at least in my case) the Zoom is useless.