In graphics terms when someone says 'realtime' they usually are referring to the performance of the algorithm, not whether or not there's a delay. Lots of video games have input delays of 100ms or more.
The framerate is pretty bad, though. I wonder why - I was under the impression the Kinect captures at 30fps.
It looks like he had a CPU monitor on his panel, which also looked pegged. Could just be he needs to spend sometime optimizing cause the Kinect can certainly record faster than that.
