This project is from the same team that recently set the Guinness World Record by building a Human Powered Ornithopter (http://www.youtube.com/watch?v=0E77j1imdhQ)
It sustained altitude and speed for a while (short of 20 seconds).
I guess we can dismiss the possibility of ascending currents in this case, since the test was performed on uniform land, at dawn.
Is there a possibility for the phenomena you describe to occur 10 meters above flat land at dawn?
Thermals can be triggered by any perturbation in the atmosphere - a gust of wind, a truck on the highway or a temperature differential caused by the sun. But they are _sustained_ by vertical temperature differences in the atmosphere: As an airmass rises, it expands due to the lower atmospheric pressure. This expansion causes the airmass to cool adiabatically, approximately one degree Celcius per 100 meters of gained altitude.
However, meteorological conditions can cause the temperature distribution of the _surrounding_ air to be different. For instance, after a clear night with no clouds, perhaps the air from the ground up to 2000 meters altitude actually decreases in temperature 1.1 degrees Celcius per 100 meters of altitude gained. If an airmass on the ground starts moving upwards in these conditions, it will still cool adiabatically - but slower than the rest of the atmosphere cools due to the meteorological conditions. So a rising airmass will actually accellerate, because the airmass grows hotter relative to the surrounding air as it rises. This is a thermal. It will keep moving until the temperature of the atmosphere starts rising with altitude. Condensation (cloud formation, cumulus clouds are caused by thermals) can increase its vertical speed.
But to answer your initial question: Yes, they can and do. But when the atmosphere is so _unstable_ (unstable atmosphere == temperature falls very quickly with altitude) that thermals are spontaneously triggered without help from the sun, it will usually mean bad weather or thunderstorms later in the day. So if the air seems calm at the surface, it will pretty much be guaranteed to be calm at 10 meters altitude. You can detect thermals at ground level by rapidly changing wind direction, often on nice summer days. In the air at low-ish altitudes (less than 2000 meters), thermal activity is indicated by turbulence.
And a hang glider isn't powered at all. It has no thrust.
In general, I wouldn't call a hang glider human powered either even though a certain amount of human power output is responsible for its sustained flight.
This is in contrast to a craft with a non human power plant. Even in cases where the human is using some kind of power output to further assist the aircraft, the output of the power plant is several orders of magnitude larger than the human's output. Which in some cases may be simply moving a control mechanism.
And then there are what could be referred to as human "assisted" craft where the human power output is actually equal to or close to the output of the non human power plant.
I think the human assisted craft are more likely to be reasonably useful. We're just not suitable for the type of sustained power output that is required for fully human powered flight.