This is great progress. Sure it is running on a flat surface, but you have to crawl before you can walk (or run rather). Military uses aside, this is really a technology foundation for animal and/or human like assistance robots - think of the movie "iRobot". We may even see robotic pets like dogs, cats, perhaps even horses. Maybe someday replace the bulls and horses at rodeos removing the life threatening aspect? Could replace the fox in the English "fox hunt"? Could be used as horse riding training vehicles - much safer for children to learn that way? No more greyhound racing using real dogs - contestants compete instead with their latest greyhound robotic dog? I wonder why they used a combustion engine (I'm guessing some modified motorcycle), instead of an modified electric motorcycle. Maybe that's what they will do next?
Interesting they are using the gasolin engine for a powerplant (hydrolics?) - usually proof of concept doesn't need to deal with a "practical" power source. This thing could probably have a large range using gasoline. It was nice to see the gallop and trot - any dressage ;) We have seen others climb stairs and clear obsticles although who really knows what it's capabilities/limitations 16mph is pretty quick on legs. That is quite a large mass to move, balance and even turn - very, very impressive - and it seems to have all the logic on board - it would be nice to know how autonimous it is. It also looks like they could easily tuck the legs, or have it in a cart for transportation. Very impressive demonstration.
I could be wrong here, but I think the goal is to have something that can transisiton from sprinting on even terrain to navigating things where wheels don't work well, Imagine this and bigdog combined.