I've been using the voice command system and for the most part it's pretty awesome, except now whenever I try to command an ally (for example: "Ally Wait" it will give the confirmation that I said the correct command, but there will be a red 'X' next to it and it doesn't work. This happens for every Ally command. Anyone know why this might be occuring?

Xbox hardware questions go in the Xbox Hardware Issues forum.

You might be too far away from them when using the command or not looking at them when you do it. The one thing i can't stand about the kinect though, and i'm not sure Bethesda can fix this, is how when npc's are talking or the music and combat effects are loud while playing, it has a hard time hearing your kinect commands. I can't stand that. As cool as it is switching spells on the fly, its absolutely stupid how i can't do it in combat because it won't hear me. I either have to turn off the music in skyrim which is lame or the effects and i hate doing that. One time two npcs were talking and it thought i said slow time so my character did the slow time shout.

Edit: Try this link
http://www.gamesas.com/topic/1370826-kinect-help/

I'm definitely close enough, it acknowledges the command but displays a red 'X' to it.

and to the mod-in-training, I figured it would be answered in a more timely fashion here, as there aren't many people who sit and stare at the hardware forums, I'd wager. If a mod wants to move it, please do.

You may also be using a follower who isn't applicable to the kinect commands. i know the dark brotherhood initiates fall under that category. It was a bummer when i found that out. Who is your follower if you don't mind me asking?

This definitely isn't a Bethesda thing. I have the same problem trying to use kinect features when watching a movie. Most times it can't hear me, I have to talk to it like I'm giving my dog hell for being bad.

I suppose that this is the issue. I was having no trouble getting it to work on my Nord character, but I was using a follower from an inn. The only problems I'm experiencing it with is when I'm trying to command Serana, or a DB initiate.

Won't work with Serana for some reason. I guess because she's not an official follower. Apparently it doesn't work with quest related followers, only true companions. Too bad really because Serana has been with me for quite a while now and she can trade items just like a normal companion. Not sure what their logic was on that but unfortunately they just won't work on her.

Yeah thats the reason why. I'm not sure why they don't work with the kinect commands but there is nothing you can do about it really. It svcks but I'm sure they will fix it in a future patch.