But can they distinguish between a vise-grip and needlenose?

"I'm just wondering what's been happening since in this area."

Good timing, there was just a new study in the news a little over a week ago.

http://www.npr.org/templates/story/story.php?storyId=124581153&ps=cprs

The same group is able to distinguish brain patterns from individual words
Just MA, Cherkassky VL, Aryal S, Mitchell TM, 2010 A Neurosemantic Theory of Concrete Noun Representation Based on the Underlying Brain Codes. PLoS ONE 5(1): e8622. doi:10.1371/journal.pone.0008622

Others are making progress on reconstructing observed images based on the visual cortex response:
Bayesian Reconstruction of Natural Images from Human Brain Activity
Thomas Naselaris et. al. Neuron Volume 63, Issue 6, 24 September 2009, Pages 902-915

I can keep digging up the many publications on this topic, but you can too! I'm not sure how snide your original comment was, but, 10 years ago (even 5 years ago), if you told an electrophysiologist that's we'd be able to get these types of information from the slow, low spatial resolution signals we get from fMRI, they'd have laughed you out of the room. None of this is dramatized mind reading (and certain dramatized things are not possible with the current technology), but it's still pretty impressive progress.

Thanks to both of you for the links.

And, bsci: I wasn't being snide at all--I think this stuff is cool! (My Ph.D. thesis was on medical imaging, and things have sure progressed in 20 years.)