He is talking about the touch panel lower half of the laptop mockup.
It could be designed to work very well, but we're not at that point yet. There's some cool haptic technology that cold give a better "clicky" key response when typing, and I'm sure there are ways of buffering the glass so you don't get toejam from slamming your fingers into a glass panel for hours a day.
I think the trackpad as a palm rest thing cold be worked around. The multi-touch trackpad is getting sophisticated enough now that it can tell how much input is being applied over it's surface area, and you could have it ignore the input associated with resting your palms on the pad.
Also, it kind of begs the question of configurability. Someone said they don't like how the keyboard looks. I can't see Apple releasing a touch-panel device like that without allowing the user to place the keys wherever they want, or at least chose between some preset locations.
It's a really cool idea, and I'm sure they're already working on it in some way or another. I just hope they don't throw it on another generation of MBP's before all the kinks are worked out!