From this article, it has appeared that the problem was solved, since they mention that is a lot lighter and provides more freedom of movement.
Being used for skiers and mentions its use in body armor at the time (2010). I'm pretty sure I read an earlier article than that one as well, perhaps from 2006 or so but I can't find it.
I can't tell from this new article if they've improved the fluid, or the method of application to kevlar is the novel part.
and about a year afterwards they began talking about using the same as armour. just stuck in my mind as the kids show came first.
from 2003. http://www.youtube.com/watch?v=JkS1ymQ73oc&feature=relat...
from 2004. http://www.technovelgy.com/ct/science-fiction-news.asp?newsn...