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Watson is a simulation, a clever puppet designed to mimic human behavior. We have no more to fear from it, than from a punch and judy show. Cleverer and cleverer puppets will not become intelligent machines. A dedicated effort to build a massive neural cluster simulation might become intelligent, but it will think such incomprehensible thoughts as to be fairly useless to us (think intelligent rhododendon; what would…
And how will we know that Watson actually feels fear, or will we just get someone else saying "Watson is a simulation, a clever puppet designed to mimic human behavior" response? Anyway, the answer to this type of conundrum is simple and well-known: http://en.wikipedia.org/wiki/Turing_test Of course it should be noted that we aren't there yet for Watson. Even in the restricted domain of a game show, when Watson fails…
The best bots can already carry on conversations better than a low-intelligence human who isn't concentrating on the task.
It's generally possible to distinguish bots by asking more probing questions. The problem with that is as the Watson project shows it is quite possible to build a computer system that can do well on hard questions too.
That leaves emotional-response type questions, but many of those a culturally specific, and so can really only identify something as being either a bot OR a person from a different culture.
My view is that the Turing test is much closer to being passed than people think, if you specify a Turing test that all humans can pass.