They've got an internal preliminary playable-to-the-end build of the game up and running, but there's a lot of things missing yet and most of the movies are still animated storyboards. There are still some puzzles that need inside knowledge to solve, but they hope to have an internal beta version of the game ready by February that will allow the game to be completed by people who don't know the solutions to all the puzzles.
It's good to know that chapter two is coming along nicely, as The Journey Down Chapter One was one of my favorite adventure games of last year.