$495 isn't for the screencasts; the Vanguard is a de facto training course, and those usually run $500 per person per day. Every Vanguard member will get lots of individual mentoring and attention; people who don't find that valuable shouldn't sign up. (N.B. Ryan Bates doesn't provide one-on-one or small-group mentoring for Railscasts viewers.)

The Vanguard is a group to help make the screencasts; the screencast product itself will probably be over 10 hours and cost around $50, which I think is pretty cheap. And it will be designed to complement things like the Railscasts and PeepCode, which tend to cover intermediate and advanced topics; the Rails Tutorial screencasts are designed for beginners who aren't yet ready for that material.