Wanted to add some to Mikero's answer.
There are three main contributions of the research
A proposed indistinguishability obfuscation for NC1 circuits where the security is based on the so called Multilinear Jigsaw Puzzles (a simplified variant of multilinear maps).
Pair the contribution in 1 with Fully Homomorphic Encryption and you get indistinguishability obfuscation for all circuits.
Combine 2 with public key encryption and non-interactive zero-knowledge proofs and you functional encryption for all circuits. I believe that prior to this functional encryption for all circuits was not possible.
So, the answer really depends on which contribution you are referring to.
Are the results as ground breaking as the article suggests?
If you are referring to contribution #3, then I think the answer is a definite yes (even if in implementation would still not be practical due to FHE use in #2). The reason for this is that until now, FE for all circuits was not possible. So, this is the first construction of FE for all circuits.
#1 and #2 have the possibility of being fairly ground breaking. Though, as noted by others, we are only beginning to realize what indistinguishability obfuscators can do. This paper presents one application, FE for all circuits. Another paper by some of the same authors uses IO to build deniable encryption. I'd suggest reading that paper too if you are interested in the area.
does anyone have a clear idea regarding exactly what aspect of an implementation the method will potentially obfuscate?
This really depends on what you are talking about. If you are talking about #1 and #2, then we don't really know. To begin, we must understand what an indistinguishability obfuscator is. Say we have $\mathcal{O}$ which is an indistinguishability obfuscator and two (functionally equivalent) circuits $C_1,C_2$ of the same size. An indistinguishability obfuscator says that $\mathcal{O}(C_1)$ is indistinguishable from $\mathcal{O}(C_2)$. Furthermore, it was shown that $\mathcal{O}$ has the property that no $\mathcal{O}'$ (even an inefficient one) makes $C_1$ and $C_2$ more indistinguishable. Notice that all this says is that obfuscated equivalent circuits are equally obfuscated (since they are indistinguishable). And that no other obfuscator can make them more equally obfuscated. This says nothing about the quality of the obfuscation (i.e., can you get the program internals from the obfuscation).
Now, if you are referring to #3, then the story is different. Functional encryption (in the standard sense) is not function (or software) obfuscation. So, #3 does not obfuscate anything if you are talking about the function computed by the functional encryption. Though there are techniques to hide the function that I'm guessing can be combined with this result to any circuit.
The researchers said their mathematical obfuscation mechanism can be used to protect intellectual property by preventing the theft of new algorithms and by hiding the vulnerability a software patch is designed to repair when the patch is distributed.
which means all obfuscated software are potential malware. But really, wouldn't that technique make AVs practically irrelevant? I think the article is available here $\endgroup$