"This cloak is able to conceal a macroscopic object with a maximum height of 2 mm, larger than 3500 free-space-wavelength, inside a transparent liquid environment"
The PDF is downloadable from here:
http://arxiv4.library.cornell.edu/abs/1012.2783v1
The setup is only proven with a laser from one direction with a specific green pattern.
From page 8: "The observer in all cases is assumed to have a fixed height of h"
"This cloak is able to conceal a macroscopic object with a maximum height of 2mm. [...] The observer in all cases is assumed to have a fixed height of h."
So we could hide microscopic hobbits from the Eye of Sauron?
You think? The whole thing seems paltry to me-- it is the equivalent of the common magic trick of hiding objects via mirrors. You blanket a tiny object with calcite, so that the light is bent around the object when viewed from a fixed angle? Big whoop. Let me know when you can hide something the size of, say, a shoebox, from an observer who can wander around freely, and I'll get excited.
This is certainly an important discovery, seeing that they extended previous solutions to work for light of different wavelengths, but it's hardly an invisibility cloak if the observer is assumed to be at a fixed position. Just like "quantum teleportation" is not actually teleportation, but nevertheless every article about it mentions Star Trek.
I think you might misunderstand how these systems work.
Your mirror analogy is more correctly applied to current military stealth systems: tricks of geometry are used to make the vehicle harder to detect.
With these "invisibility cloaks" there is no indication to the observer that the object even exists. The light appears to have passed completely through the object and reflected off the surface below with no interference.
If I am reading the material correctly, the light appears to have passed completely through the object if and only if you happen to be sending the beam of light of the wavelength they are expecting from exactly the position they expecting.
Did you even read the article? It explicitly states the cloak bandwidth includes red, green, and blue optical frequencies. Calcite's dispersion relation gives slightly different shifts for each frequency, but this is nevertheless a huge step forward.
From my reading, in this case the light still bounces off the material in question. The reflected light follows the path which it would if the object were not there, but presumably the object still absorbs some of it.