"The reactor, which resembles a large cylinder, is comprised of layers of advanced, ultra-high temperature insulation and ceramic materials. It measures roughly 2 feet by 3 feet and weighs a hefty 1,750 pounds.
The conical geometry of the reactor’ design uses gravity to feed zinc oxide powder (the reactant) into the system through 15 hoppers.."
"...where it converts to a zinc vapor. At that point the vapor is reacted with water separately, which in turn produces hydrogen."
"During testing, light concentrated to simulate the energy of 10,000 suns will be focused down into the reactor, sending the temperature within soaring to over 3,000 degrees Fahrenheit, nearly one-third the temperature of the sun’s surface."
One interesting feature of the reactor is that, in theory, the zinc oxide byproduct created during the reaction will be re-usable, making the project self-sustaining."
This article is completely lacking any info which would allow the reader to judge how news-worthy this story is. Is this supposed to be a primary energy source (e.g., sunlight goes in, hydrogen for fueling cars comes out)? If so, what advantages does it have over existing technology? Does it have hope of being economically competitive?
It's one of many, many research projects in thermochemical hydrogen production -- the idea of splitting water using only heat (thermal decomposition), indirectly through longer chemical processes. It's been going on since at least 1977 , and there's 352 known thermochemical cycles for splitting water  (including zinc/zinc oxide), including the 14 listed  on wikipedia. The news today is that a grad student in Delaware built a small lab version of one of these, which he plans to run experiments with. His school media office wrote a press release for him , which was cloned by Physorg and written about on a few blogs.
In general, the idea (thermochemical hydrogen production) is just what you say -- heat in (solar, nuclear also researched), hydrogen out. No byproducts, as the chemical intermediates form a closed cycle.
Sunlight, zinc oxide, and water goes in, hydrogen comes out. This is a prototype about to undergo 6 weeks of testing to answer the very question you pose about it being economically competitive. The main advantage this has? No emissions such as carbon dioxide.
Do any solar-powered generators of hydrogen produce carbon dioxide? Is the idea here that this would be a primary source of hydrogen for cars? Or is it only competitive in certain restricted applications?
The part that is missing is the energy costs of reprocessing the zinc. I didn't pay attention in chemistry 30 years ago, but I assume the zinc is reacting with the water and isn't just a catalyst. Hmm, a little googling shows:
This is a ceramic furnace as large as a washing machine, as heavy as a Honda Civic, that needs to be 6 times hotter inside than their home stove/oven/range, and the fuel (ZnO) is safe to eat in small quantities (breakfast cereal) but is toxic(?) to breathe.
I'm having trouble seeing why it would take long for a startup to start baking the clay for one of these in every home.
Zinc boils at just over 900 degrees centigrade. I guess that might make this a bit risky as a device. If, as you say, Zinc in gas form is toxic, that might be a problem.
Two by three feet and 10000 suns translates to "on a perfectly sunny day, needs a 200 by 300 feet solar collector" to produce the required heat. Actual numbers for a machine operating throughout the year will be quite a bit higher.
Speaking from experience (DIY foundry mishap involving brass), even small amounts of airborne zinc fumes are sufficient to knock a healthy adult flat on their ass for four days with superflu style symptoms.