Kinect Fun Labs, the free-to-download toys for Xbox Live Arcade (and Kinect) that have delivered optimised avatar generation and zany object animation (but not advanced penis recognition heuristics) look to be joined by an air-band application getting you and your friends in on a pantomime jam session.
Germany's ratings board has passed judgment on "Air Band", calling it an "arcade/music" title. That's all that is known for now, but with that kind of a title, one can probably expect a rhythm-game experience. We'd guess it matches your movements to your avatar's air guitar/air drums motions.
Ready for a Kinect Powered Air Band? [Siliconera]