Only thing Natal will do is make all thoses parents, who bought that and Halo 3 for there middle school kid, buy natal so EVERYONE can play on the 360. So now all the 13 year olds that swear and ack like dicks on XBL will have less time on XBL casue there 6 year old sister wants to paint a doggie with Natal.
Personaly, Natal doesn't intrest me, however i do see the idea. Everyone already has a wii, and most of the older kids in that house hold has a 360 to play good games. What natal will do is make the 360 more family friendly, and take time away from middle school "tough guy" that are constently on XBL.
As for dominate? Can't really say, sales wise it might, if they include a fitness mat of some kind.