Announced back in March, the Xbox Live port of Dragon's Lair was dated for May 18 by Microsoft yesterday. The game will feature Kinect support, allowing you to jump out of the way of the Lizard King and dodge the columns on the mechanical horse, if you so prefer. Digital Leisure is handling the port and the Kinect support.
Judging by that video I'm very skeptical that Kinect can make this game any more manageable. It'll be fun if by fun one means "dying a lot." Dragon's Lair is the product of an era when game experiences were designed to be short so that they kept sucking quarters from your pocket. Therefore, this features a ton of trial and error, even if you know exactly what to do. And I've beaten Dragon's Lair across multiple platforms at least a dozen times.