RTFA: http://www.ast.cam.ac.uk/~optics/Lucky_Web_Site/LI_Press_Releases_0807.htm

A team of
astronomers have taken pictures of the stars that are sharper than anything
produced by the Hubble telescope, at 50 thousandths of the cost.�
The researchers, from the University of Cambridge and the
California Institute of Technology (Caltech), used a technique called �Lucky
Imaging� to take the most detailed pictures of stars and nebulae ever produced �
using a camera based on the ground.�
Images from ground-based telescopes are usually blurred by
the Earth�s atmosphere – the same effect that makes the stars appear to twinkle
when we look at them with the naked eye.�
The Cambridge/Caltech team, however, surpassed the quality
of images taken from space by using a high-speed camera to take numerous images
of the same stars at a rate of 20 frames per second. Because of fluctuations in
the atmosphere, some of these were less smeared than others. The team then used
computer software to choose the best images, and these were combined to create
pictures far sharper than anything that has been taken from space.

As usual, there seems to be some hyperbole. However, the demonstration, taken at face value, does indicate that it’s better than a normal ground-based method.