Screens are nice but I will wait to see it in action- I liked most of imageepoch's stuff on the DS (not tried anything else) and they have or at least work with some good people but not enough for me to get excited before seeing more.
Doubt it will be enough for to sort out a PS3 setup (I think there are still a couple of YLOD ones around here I have been too lazy to reball) but I will have to remember it when emulation or something like it rolls around.
Spirits have been used as 3D model replacement all the time. In early FPS every object was a spirit. Later games used them similar to Tokitowa but it never looked really impressive. And modern games use them for far distanced objects to save system resources.
I've seen a few sites mainly stockholder circlejerk blah blah sites talking about it....but ND Twitter has said nothing and Atari has been as well...I'm wondering if this is a fake story to get Atari stock up