So did they just essentially develop a super intelligent LOD loading system that uses procedural instancing? I'm pretty sure you could put together similarly impressive demos using the latest tricks from Nvidia and ATI using standard polygon rendering. The fact they are using points vs. polygons isn't that interesting to me.
What is fundamentally missing here? Animation, lighting and shadows. Those are going to be really hard problems to solve and I'm curious how they will go about it.
Also, it's not "infinite" detail. There is going to be a fundamental limit in regards to CPU memory or GPU memory. You can only store so much "detail" at the various detail levels in the different stages of memory. As soon as it has to dynamically load an entire detailed world that doesn't include just 20 instanced models, but more like 10,000, than I'm sure it will run a lot slower.
However... I am excited for this. DDR3 is getting dirt cheap, if they could make a game that actually used all 8GB of my memory I'd be impressed.