According to a report on Winrumors.com something called Avatar Kinect is coming with the next Xbox 360 update. It will allow Kinect owners to interact with each other in some form of area with their avatars. The picture below is from Glimpse Dog, and it is being assumed that Avatar Kinect will be revealed at CES later this week.
Winrumors.com writes:
"The slides reference Avatar Kinect, which Microsoft is set to introduce at CES. The software update, delivered over Xbox Live, will allow Kinect owners to interact with each other using their Avatars. The Avatars will have a separate area, much like Nintendo's Mii channel, that will allow for users to control them using Kinect and interact to watch content or play games."