The Wii is significantly farther down that route than any Xbox.
Accessories are not the same as add-ons. The Wii hasn't had anything that could be considered an add-on (except maybe Wii MotionPlus).
Part of the reason stuff like Sega CD and Sega 32X failed is that they were pretty expensive (Sega CD was almost as expensive as the Sega Genesis itself). This is the same problem Microsoft is facing with Natal's rumored price.
I honestly don't see Natal becoming anything more than niche. It will see some support (even crap systems like CD-i and N-Gage got some third party support), but I don't see it becoming popular enough to be a big deal. Don't get me wrong, it looks interesting to me. A combination of price and what appears to be a distance problem (if you really need to be about 6 feet away, that will be a big problem for anyone who has their system in a spot with small spaces. I can't even do stuff like push-ups in Wii Fit because I don't have enough space in my room) will keep it from becoming the success Microsoft thinks it will be.
I don't think controls are a problem. The camera looks like it could register you walking forward by just walking in place, you move your hands like you are aiming a gun to aim in the game and you make a motion like you are pulling a trigger to fire. I don't know if this would work in split-screen, but by yourself I see no problem.