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The Kinect hides two inter-related and important systems inside: a method to tilt the head of the Kinect up and down plus an accelerometer. The head tilting is relatively simple; it's a motor with some gearing to drive the head up and down. Take a look at Figure 2-11 to see how it is constructed. One thing that the system does not have is a way to determine what position the head is in; that requires the accelerometer.
An accelerometer, at its most simple, is a device that measures acceleration. In the case of a fixed system like the Kinect, the accelerometer tells the system which way is down by measuring the acceleration due to gravity. This allows the system to set its head at exactly level and to calibrate to a value so the head can be moved at specific angles.