The Kinect is a great idea - it gets you moving while you're playing your games, which is always a plus... but Kinect wants a lot of space to work properly. This can be a problem in a bedroom... or a small living room... and especially if you want to play with two players...
Nyko's Zoom is a lens-based device that simply fits over your Kinect and adjusts the distance required to play, reducing the minimum distance from the Kinect, while widening the area up to 40%. In the example setup in Nyko's booth, the distance for the second player without Zoom was up on the back of a couch (neither convenient or safe), while both players' minimum distances with the Kinect were in front of the couch.
The interaction seemed fine when I tried it out; the Kinect tracked my movements well, even though I was only a few feet from it. If you're having problems with being too close to your Kinect... the Zoom is on the way; and when it hits store shelves, you'll be one step closer to being... two steps closer.