Back in the old days, we used to call this feed splicing stuff, wait for it... aggregation!! Sure it's a bit smarter than your average NetNewsWire or FeedDemon, but it's the same general principal.
Seriously though, this is a really cool idea, merging "regular" blogging and photoblogging, and one step closer to my concept of a photomesh. Also, the concept of being an integration platform for differing "best" media blogging tools is a winner. The sweetest sounding part of the announcement, pending execution, is the development of APIs and standards.
Next up, I'm guessing, splicing social bookmarks. Flickr photos have tags. del.icio.us URLs have tags. Hmmm....
Who says there's no innovation in the blogosphere!!