From the sound of things, they're going in a direction rather similar to where Chrome wound up, but with a more deliberate abstraction: not merely that browser windows should be process-separated from each other, but that the Web browser is, more and more, behaving like an operating system, so it's about time we start treating it like one. So they've taken all the classic concepts about separation of principals and such, and explored where you wind up when you build a browser on those assumptions.
Neat-sounding project. Like most things from MSR, it's explicitly not a product, nor a product-to-be: this is just an exploratory research project. But most of MSR's better idea gradually seep their way into Windows in one form or another, so don't be surprised to see this abstraction under the hood of some future release of IE. (Possibly -- knowing MS' product side -- in a form just broken enough to compromise its rather good ideas...)