I'm listening to that first demo and... isn't it just feedback?
I'm looking at my PRS and imagining having them on it... it makes me feel ill.
Yea, it's not a very good way of demonstrating it... in the youtube video, he's playing with loads of effects too, so you can't hear what the guitar actually sounds like.
The system is kind of similar to the frets on the chapman stick (but not the removable part)... i don't see the point on the flange, why not just have a regular fret shape above the fretboard, and a triangular part below?
Bit of an odd idea, don't think it's really my kinda thing, i'll stick to normal fret profiles :)