This is a big deal. It's the first project explicitly aimed at building a high-performance general-purpose nanofactory manufacturing system based on molecular manufacturing. (The Foresight/Battelle Roadmap is an important theoretical investigation, but doesn't include development work.)
While acknowledging a lot of challenges, the project appears to see a well-defined pathway from today to a nanofactory. (The roadmap is still "under construction.")
Most of the current work is theoretical, but Philip Moriarty is listed as working on "Experimental investigation of possible tools and mechanisms for diamond mechanosynthesis."
The timeline of the project (bottom of this page) calls for inital diamond mechanosynthesis in 2010, with "nanofactories and nanorobotic products" beginning around 2020. Although this looks reasonable for this particular effort and approach, other efforts may be faster. Let's not forget that the human genome project took a lot less time than people initially expected, and most of the work was done in the last few years.
CRN will be watching with great interest to see how this project progresses, and working to steer it in responsible directions.