I think this might be useful for 'very-low bit-rate' video quality, so you would get somewhat more pleasant gradients instead of blocks. It would be kind of amazing to do the smooth interpolation in time-domain too, so the resulting video would be frame-rate independent.

I'm not sure if it can be compressed in the time domain though.

Usually vector based formats compress very well in the time domain, since you only need to store the transformations. But without testing the code, I would be surprised if it is fast enough for something like 50 frames.

Convert the (x,y) curves to surfaces in the (x,y,time) domain and you should get a representation that is very fast to evaluate. With fast forward differencing, animating the curves would only need 6 adds per control point. If you are fine with "A Scanner Darkly"-style video it would work great!

BTW: Vector videos have been used to squeeze full-screen cinematics into a Super Nintendo: http://fabiensanglard.net/anotherWorld_code_review/index.php

But to have 'organic' images you'd need to have a lot of small curves that would almost be like storing vector derivatives for pixels.

It doesn't look like it performs very well in the time domain even without compression. If you pay attention to the very brief time when they talk about supporting animation, there's very clear "leaking" effect as the gradients shift. Maybe that could be corrected with very tightly controlled parameters, but tightly controlled parameters = more data + less margin for error.