Yes there is work in this regards.
The limbs that no longer "work" due so because the nervs have suffered damage and these are of the few cells in our bodies that don't grow again. Recently it has been discovered that this is because when a nerv cell has beed damaged, some kind of protein builds up between the two parts of the cut cell, this stops the cell from growing. They tested in mice to insert a substance that disolves such protein and the result is as expected, the nerv cells repaired and the mice recovered limb movility. I don't have refferences at the moment but, this is cutting edge research and not yet tested on humans. Cool isn't it?!
4 universities get 1.2 million to build the whole thing [arm and interface] and John Hopkins gets 34.5 million from DARPA to build just the interface. It is clear to see who is more serious about this type of project.
If an interface between electronic and nerve cell can be build, an artificial limb will be controlled w/o minimal training to the patience. I had this dream when I broke my leg years back. This research is a step forward. However, will $1.2M be a bit of a small number?
@chanj, I completely agree with your question/concern that four universities must share the grant. I think this story is newsworthy because it is one of many important steps to the development of advanced and hopefully lower cost prosthetics that perform and last. I can think of people in developing countries who may be suffering and also for people who have been in landmine or other kinds of accidents. This is also specifically important for the aging population. Great story and loved the multi-media links!
DARPA quite likely had more money last year to award on what it considers to be a high priority project. On the other hand, the NSF is working from what are probably somewhat more limited funds and this is only one of many varied projects for it. Good thing DARPA isn't trying to award that this year with the current budget crisis.
I saw a functioning prosthetic arm on Jon Stuart's Daily show and i was very amazed. But if all the other functions such as the feedback mechanism, feel of the object can be incorporated then it will be big step forward. Only sad news in the article is the amount of grant provided.