Is there a space requirement for the Kinect?

Solution 1:

Yes, there is a minimum amount of space required:

The Kinect sensor has a practical ranging limit of 1.2–3.5 m (3.9–11 ft) distance when used with the Xbox software. The area required to play Kinect is roughly 6m², although the sensor can maintain tracking through an extended range of approximately 0.7–6 m (2.3–20 ft).

A bit more practical advice is offered by this article:

Microsoft suggests a space of six feet by six feet in front of the Kinect sensor for one player, and eight feet by six feet for two players.

In "real life terms," my couch is far enough away from my TV that I can pull a queen sized sofa bed out of it without having to move it and still walk between the bed and the TV stand. I still have to move the couch 2-3' back from where it sits to play with the Kinect, and that just barely makes it happy. If you've got a coffee table or anything else between your couch and your TV, you're going to have to move it as well.

Nyko makes a "small room" zoom lens for the Kinect, although I've heard mixed results from using it.