[kabdib]

Since the Xbox camera is connected to the console via a cable, you can verify whether data going over the wire. If the Xbox is off, you shouldn't see traffic. It's a /bunch/ different from traffic in a data center, which is essentially untraceable and can be cloned at many points.

Frankly I'd be more concerned about the microphones contained in ubiquitous and nearly unexaminable devices such as cell phones, and to a lesser degree laptops. (I imagine that many laptop mics are USB devices, so their traffic should be visible to drivers, the drawback being that once the traffic is on the mainboard, where it goes is less traceable).

[sharpneli]

In addition to what was stated by RexRollman it can easily store video/audio to be sent only at the next start of the xbox. "Downloading update" or "Syncing savegames" and no-one is going to notice the encrypted few megabytes of MP3 compressed audio.

[mtgx]

They wouldn't need to listen all the time, and how would you know when it's the right time to look? And even then most people won't be able to verify.

[RexRollman]

I would expect, if this was even possible, that it wouldn't be turned on by default but only when requested. Otherwise, it would be too east to catch for the reasons you mention.

[blhack]

Not quite. You activate the xbox using a voice command. Unless the kinect has a speech processor in it (which is incredibly unlikely), then it is very probably sending the sound to the xbox.

So you will [again, this is speculation] be seeing constant traffic flowing across the USB cable.