It's hard to have any trust that such a device would NOT be used for all manner of debauchery, whether that's at the hands of bored hackers / creepers (see this: »
arstechnica.com/tech-pol ··· webcams/) or bored gov't hackers / creepers.
Let's face it, not many people are going to bother taking wireshark to their connection and seeing exactly what's being passed on the wire from this thing. Even then, if anyone's read anything about the way MS passed on info to the NSA, they'd know that encryption has zero bearing on their privacy of communication to/from MS (edit: see 1st post for example!).
In other words, even if all you see is "normal" traffic to MS and back, you'd have absolutely no way of knowing if a quick jpeg was captured in there, or if chunks of audio were being passed along.
Welcome to the telescreen machine.
How long before all TVs are required to include such tech?