Clicking is lame. Users have been trained to "point and click" since the Mac in 1984, if not earlier, so it's in our nature to impulsively click when we want to take action. The point of this study is to explain that clicking doesn't necessarily have to be a requirement. Certainly an amazing proof of concept and with the advent of touch screens, this type of navigation could be very useful. Perfect for a gesture-based interface and it would save a lot of people from repetitive stress injuries.
Health is not interesting. Think about playing with it on a Wii. Given the right "medium", there are many places where this innovative idea could take off. Speaking of games, this experiment reminded me of Don't shoot the puppy game, where you learn to use your mouse - the sad way!
A new UI standard? The only disadvantage is that it would be difficult to implement it using Flash (imagine the time spent on building that site) but what happens when a comparatively new tool like AJAX is brought to the scene? Then again, it will be rare to see such sites. How about a Firefox extension?