I'll be kind and say its marketing hype.
It certainly is marketing, but I would not label it as hype.
The gut that makes this tick is a dual interface display controller.
On one side it can interface to a microcontroller (choice of SPI, 8-bit or 16-bit). The controller supports 18-bit RGB (262k colors) with the QVGA resolution of 320x240. For every pixel on the screen there is 18-bits of RAM to control its color. This RAM makes up the display controller frame buffer.
The other side can interface to a live video feed (camera). This is the traditional horizontal/vertical sync video that is taken from the camera and redirected to the LCD panel by the display controller. Because of its dual interface it also has the option to overlay the video on whatever is in the framebuffer and even rescale the overlay.
When you "take a picture" you simply freeze the current video feed and capture the image in the display controller frame buffer. Once it's there you can stream it (via SPI or 8/16 bit interface) to an SD card. Even a full resolution (320x240) image can be read from the controller in less than a second (e.g. SPI at 8MHz) by the onboard AtMega. Writing to an SD card (in 512 byte chunks) will however add to the time.
Really there is no magic about this if you understand how it works and even image analysis (object detection etc.) would be possible on an AtMega with appropriate software.
As for marketing - the AtMega32 is not on the list of supported Arduino AVR's - nor is the board itself. As such I think labeling it as Arduino compatible is a stretch. Also when you add software for LCD support, a couple fonts, touch controller software and an SD card library there is not much left on an AtMega for other tasks.
As for what Mowicus wants I still think this is within reach.