If you haven’t heard of the concept before, a protocol analyzer is a device that captures and analyzes all of the information that is sent across a communication channel (such as a serial line, Ethernet connection, or in this case a specific wireless format). This data can then be used to debug or reverse engineer whatever protocols were being sent over the communication channel. Akiba’s project is specifically aimed at monitoring the 802.15.4 wireless protocol, which is the underlying protocol used by xBee devices, as well as anything that uses the Zigbee protocol. By feeding captured data from his Freakduino board into Wireshark, an open source protocol analyzer that knows how to decode different kinds of data packets, he shows it is easy to reconstruct the conversations between two xBee nodes.
From a security standpoint, none of this is really new- there are already both commercial and homebrew projects that accomplish the same goal. What Akiba has done, however, is to provide a simple, fully open source version that is affordable to hobbyists. This could get really interesting, as more commercial devices come out that use these standards!