Last week there were rumors that Microsoft was prepping a $99 (US) Xbox 360 bundle that would include Kinect. Today Microsoft officially announced a $99 Xbox 360 4GB bundle that includes a Kinect and a two year subscription to Xbox Live. However, you would be required to pay a monthly fee of $15 (US) per month for the next two years, just like a phone contract.
If you want to leave the contract before it is up, there is a early termination fee just like if you were to try and leave a phone contract early. However, this is a promotional offer so it may not be around for long; and as of right now this deal is only available in America and there is no timetable for when it might be coming to Europe.
In addition, as I pointed out in another article with this $99 bundle you will be paying more in the long run, especially considering this is only a 4GB version Xbox 360. At this point I would recommend nobody buy a 4GB Xbox 360 version even if it is the cheaper version. You will end up needing the bigger hard drive eventually so buy the more expensive Xbox 360 with the 250 GB hard drive it will save you money in the long run.
Not to mention the better this deal sells the more chance there is that Microsoft will use this method in the future maybe even for their next generation system.