I came across this article, which describes a method, developed by UCLA CS professor Amit Sahai et al, for using functional encryption in order to achieve software obfuscation. The paper that the article refers to is available here. Has anyone digested the paper and have more information to share? Are the results as ground breaking as the article suggests?

In particular, does anyone have a clear idea regarding exactly what aspect of an implementation the method will potentially obfuscate? Does it only apply to hardware implementations at the integrated circuit level? Does it apply even if the adversary is able to track and map signals once the chip is turned on? Does it apply to software implementations for generic platforms, even if the adversary has full control over the CPU and internal memory (e.g. in case of emulators)?