Folks! Those of you who saw this demo at Picademy 2, here is the the link to the instructions.
Andrew Mulholland (@gbaman1 on twitter) is the creator of this great project and he is looking for people to help test it in real schools and provide feedback so that he can improve it.
Step 1: Salvage an old Windows XP machine that would otherwise be thrown out... (to be the LTSP server)
Step 2: Download and Install Ubuntu Linux on it... (you may need to burn a CD or DVD).
Step 3: Go here and follow Andrew's instructions...
Here is a video of it in action!
If you plan to have a lot of Pis using the same server then it is recommended that the server PC has a Gigabit network card.
Something like this, they're dirt cheap; http://www.amazon.co.uk/dp/B000FO6QWM