Does this thing really do what they say?
If it does, it looks like this will probably be the biggest breaktrough in science ever :)
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This question is a near duplicate of Does the "Energy Catalyzer" generate energy by converting Nickel to Copper? , but perhaps it is ok, because some time has passed, and there is more confidence in the assessment.
It is not reasonable to reject Rossi out of hand, because there are observed unexplained nuclear reactions in Palladium/Deuterium systems. In Deuterium/Palladium, there are hundreds of duplications of the nuclear effects, with undeniable excess heat, and next to zero neutrons. The level of excess heat is impossible to explain with any sort of chemistry, and the production of Helium, trace amounts of tritium, trace amounts of neutrons, and high-energy alpha-particles (in co-deposition), is impossible to explain without a nuclear reaction.
While Pons/Fleischmann's work should have been conclusive, if you have doubts, look at the photographs of the infrared emission from SPAWAR: http://www.youtube.com/watch?v=Pb9V_qFKf2M . The SPAWAR evidence for high-energy particle emission is also conclusive, as were the earlier measurements of transmutation products with unnatural isotope ratios in the system. You can read about Deuterium/Palladium cold-fusion here: Why is cold fusion considered bogus? , and there is much more information at lenr-canr.org.
Unlike Pons/Fleischmann cells, or variants like Arata's or SPAWAR, Rossi is claiming fusion of ordinary hydrogen in Nickel. On the crazy-meter, Nickel-Hydrogen cold fusion is to Pons-Fleischmann cold fusion as Pons-Fleischmann fusion is to fire. In order to get something nuclear to happen with protons and Nickel nuclei, you need to overcome the MeV electrostatic barriers between nickel and protons, not the KeV barriers between two deuterons.
The demonstrations Rossi held were not convincing. You can read cogent criticism from eyewitnesses here: http://tech.groups.yahoo.com/group/H-Ni_Fusion/message/226 . When the machine is working, he claims that it produces dry steam, and calculates the heat emitted by calculating the heat required to boil water. But the actual output is a "feeble mist", which can be generated cheaply by spraying the water through a nozzle. He would tilt the output hose, in ways that suggested to the observers that he was draining water that had pooled up at the output. This suggests outright fraud, not an honest mistake.
He submitted a sample of Nickel that he claimed had been used in an e-cat for a while, and the Nickel had copper and iron in it. But the Copper and Iron in the sample had natural isotope ratios, it was as if somebody has just mixed powdered nickel, powdered iron, and powdered copper. If the iron and copper were produced by a nuclear reaction, it is statistically next to impossible that they would have anywhere near to natural isotope ratios.
Rossi claimed he would have a working reactor this month, but he has postponed the rollout. He claimed he has no financial stake except for selling the energy from the reactor, but he owns companies that claim to be in collaboration with him, companies that are headquartered in small apartments and have no staff, which actively seek investors.
But despite all his bad intentions, Rossi will do more good than harm, if he helps advertize the honest cold fusion work of the past two decades: great work done on a shoestring budget, mostly by retired people in their spare time, heckled by pompous idiots.
Fake. Real thermonuclear reaction would kill everything around due to heavy neutron radiation. Even 1 meter of lead would not help.