The device, known as the Little Buddy Child Tracker (available here) is a small portable GPS tracker that can be stored (or snuck) into a backpack, lunchbox, or pencil case. Parents can then log onto the web and see where their child is at all times, or receive SMS alerts if they leave a designated area.
It looks like you can track where your child is using a Google Maps Street View type feature, designate a perimeter that your child is supposed to stay in, and make a note of different destinations. The end result supposedly is that your kids are safer (assuming they don't chuck the device onto the kid next to them on the bus or clip it to the family dog), because you can always know where they are.
In reality, the idea -- while attractive for the paranoid parent -- is also a kind of creepy. I mean, what fun is it to be 14 and skip going to the library after school and instead hang out at Taco Bell with the high schoolers if your mom is going to be trying to track your whereabouts from her BlackBerry?