According to this Joystiq story, Microsoft has said outright that there is no truth in yesterday’s speculation that motion-sensing plays a part in Banjo-Kazooie: Nuts & Bolts.
“There is no truth to this speculation,” said a spokesperson. “Ken’s comment is in reference to rotating the left analog stick while hitting the X-button to move different things in the game.”
The motion-related chatter emerged after Microsoft’s Ken Lobb was heard in a developer commentary saying that, “You basically grab with the wrench and then you twist the controller around and it’ll move different things in the game.”
Microsoft’s staple line for this type of thing is, “We do not comment on rumour and speculation,” so you really can consider this dead. That’s dead. As dodos.