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Is there a reason many of these crazy image processing technologies never seem to have actual demos or releases? The only exception I can think of it the "smart erase" idea, which has been implemented in Photoshop as well as Gimp.

This is an academic project - the main goal is typically to publish a paper, not to release a demo or product.

Photoshop has added, and is regularly adding more, features based on similar technologies. An example of a content-aware featuree: http://www.youtube.com/watch?v=D58CG_-AWnY

What other image manipulation software do you follow closely?

I don't follow any closely, I just remember seeing several tech demos similar to this.

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