Actually, this seems much better for Elite than the Oculus Rift - this device could offer all the same virtual immersion of the Rift plus a real physical cockpit, with tablet-screen controllers, flight-stick, instruments, notes, etc.
..except you can't project black light. An interesting article from a couple of years ago on the difficulties that face AR.. Be interesting to see how ms tackle some of these, assuming the video isn't too exaggerated.. (remember the early kinect videos and that lightroom thing?)
http://blogs.valvesoftware.com/abrash/why-you-wont-see-hard-ar-anytime-soon/
It looks like a great concept, the hands on impressions sound great, it was in a very controlled environment though.. Time will tell, interesting times for sure though!