Answering my own question...

OK, the darn thing's only £70, so I'm going to buy one and test it out. Blog report coming.

("Only" £70? Yep. Currently, the best hand-tracking solution I'm aware of, from Animazoo, costs £13,000. £70 is a pretty good deal even if it has some limitations.)

Yup. It works just like that. Now, keep in mind that it's not going to work perfectly ALL the time. If you get into complex occlusion cases it may not be able to reconstruct the skeleton perfectly.

It's not as good as the video implies... still quite easy to get it to glitch out. Notice in the demo video that they flip their hands pretty quickly. if you rotate them slowly things get a bit funky. I guess it's pretty hard to compensate for occluded fingers.

It does work just like the video although it is not perfect. They said on Reddit that they are going to keep pushing software updates to improve the tracking.

I've never had mine work anywhere near as well as the demo implies, even in well lit environments and placed in a pre-tested spot.

edit: That said, maybe the new API is ridiculously better, but I doubt it.