This looks really impressive.
It seems that Celemony (the makers of pitch/time-correcting sound editor Melodyne) have cracked one of the hard problems of digital audio processing: how to extract and modify individual notes in recorded chords. The video demonstrates this technique being used to transpose and re-edit recorded guitar chords as if they were MIDI scores, or even to play chords on a MIDI keyboard and have them played out using a sample. Which looks amazing, though, alas, it won't be with us until autumn (in the northern hemisphere).
Wow.
Wonder what the trick is. It would be interesting to see if it could separate out two different instruments. And indeed what it does with things that change pitch smoothly. If it can do both those things then I'd be very very impressed.