I've been in arcades and played games that use 3D motion, and I can definitely say, "Yeah, I want more of this". It's a cool concept, and if Revolution has a couple of games that use it well, I'll be first in line to buy one. Those arcade games struck me as the most exciting thing I've seen since Super Mario 64. The DS is the second most exciting thing, so, at least for me, that says a lot for the potential of the Revolution.
Whether or not Nintendo will take first place is very much up in the air, I think this is a big gamble, but I think it offers a much better chance of a big improvement in marketshare than releasing another traditional system. I agree with Ian that must-have games will be key to the system's success. Quality marketing will also matter, especially if Nintendo is to capture non-gamers. My guess is that the company will see a good improvement in marketshare, but probably not to first place. If Nintendo did come in first, even if it was heavily on the backs of non-gamers, I think we'd still see better traditional game support than the Cube. I think there will be a big enough group of hardcore gamers on the system to support traditional games no matter what.