Really though I think it'd be easier for them to just give customers the option not to plug it in, but my guess is that they're trying to make sure everyone uses the kinect that they ship with the console (its not necessarily being used for nefarious purposes), but with that being said I still don't trust Microsoft.

Really? What about mute people? Microsoft can't be that accessibility-impaired!

I guess the difference with this microphone is that it's listening to you all the time by default, and that creeps some people out. But it's not sending your words over the network, and is not more likely to start doing so than any of the aforementioned devices (actually, much less, because of increased security); it's just pattern matching for the word "Xbox". Kind of like the initial worries over Gmail "reading your email" to target ads: I predict that this too will peter out once people start actually using the product, albeit perhaps never die completely.

(For the record, the fact that Gmail messages can also be read by law enforcement under some circumstances is both a serious issue and irrelevant to the analogy.)

Not any speaker, but you can use some headphones as microphones very easily.