This is definitely a very interesting, and important, piece of news. Svante Paabo, the German scientist that leads this effort, is someone whose research molecular geneticists (and other scientists) should follow.
Another aspect of this story is the fact that DNA sequencing technology has advanced so much that research like this is possible. The cost of DNA sequencing continues to drop and the instrumentation is becoming more and more powerful (and fast). The instrument Paabo used, the GS FLX (aka the 454 instrument), is but one of the first instrument of the so called next generation of DNA sequencing instruments. Imagine what kinds of things we will see when the "third generation" of instruments, already in development and some commercially available, start generating data. One of these instruments, by Pacific Biosciences, is capable of reading DNA sequences in real time as the DNA molecule pass through the DNA polymerase itself. For a nice short article about this technology, click here.