I realize that this is an old thread, but I had to create an account to clarify something so that future readers are not sucked in by southsider's ignorance.
Please note that I have no experience with this product, the manufacturer, or technology... I am just an interested buyer with some basic common sense and a couple of undergraduate physics courses.
1. There is nothing revolutionary about this technique to heat water; here is a simple freshman Chem lab about it: http://www.chemistryland.com/CHM107Lab/Exp06_Blender/Lab/Blender.htm. Ff you talk to experienced chefs, this is something they need to be aware of when preparing some dishes... mixing will cause ingredients to heat and may cause the recipe to fail. For example I found a quote from http://baking911.com/quick-guide/how-to-az/creaming-mixing-method that talks about this; of course the ingredients are more vicious than water so I expect the effects are more pronounced, but the theory is the same.
Aquarists also have to deal with friction generated heat in their fish tanks; salt water tanks require very high water flow and some tanks actually require chillers optimal temperatures. The greatest heat source is lighting, however I have read of discussions about why these chillers sometimes come on when the lights are off and it was determined that the friction of the water through some types of filter systems will cause additional heat that must be dealt with.
2. Their solution is not practical in most cases. "Electric resistance heating converts nearly 100% of the energy in the electricity to heat." (http://www.energysavers.gov/your_home/space_heating_cooling/index.cfm/mytopic=12520), so replacing resistance heating with friction heating would be stupid in most cases. I know one of the snarky comments was that we could just replace our hot water tanks with one of these "hot sticks", but that's just stupid; the temperature differential across this device would be a fraction of a degree, only by recirculation would any heating effect be felt and recirculating would require an inefficient pump.
3. I would imagine that the manufacturer has patents on the device but they did nothing revolutionary, they just made a minor improvement over systems that ONLY us waste heat from the pump; thus no buzz. They use some of the pump output (moving water) to generate heat. It's like a car, it uses waste heat from the engine to heat the cabin; but it may sacrifice a couple of HP to power their heated seats too.
4. This method would not make any sense in situations with high heating requirements as a far more efficient heater could be used. But with the cost of the heater, the increased warranty costs, increased complexity, and so on, this inefficient solution is probably far more effective for this product.
5. The amount of waste heat available is limited by the maximum load the motor can handle (greater load = more heat), and reclaiming the waste heat is inefficient; you can't simply immerse the motor in the water. So if you want to increase the heat generated by the pump, you need to look to using some of the work the pump does (moving water) to generate heat. So their solution of using water friction and cavitation is actually pretty smart as it is 100% efficient (all heat generated reaches the water).
So in essence the whole purpose of this device is to convert some of the work of the pump to heat to supplement the waste heat; and it does that at 100% efficiency. While it it's not efficient to pump water when all you need is heat, the savings of integrating a heater (for most people) would not justify the cost of it.
