They're a vaporware investment scam. Similar scams include the Moller skycar, Stanley Meyer's water-fuelled car, and the Phantom videogame console.

The Steorn scam followed this very typical arc:
1) Steorn got headlines on places like CNN, Fox, USA Today and Slashdot. They claimed they had already invented a perpetual motion device, and were looking for scientists to test their claims. They claimed NOT to be looking for more investors.
2) Inevitably, a flood of morons came knocking to invest in their company.
3) Steorn delayed and grabbed more headlines to attract more idiots.
4) Steorn publicly demonstrated their invention and it didn't work.
5) There will be a class-action lawsuit in the future as more and more idiots realize they were ripped off.

Anyway, here's five stars for the Irish kid at ~4:00 saying, "It must not be a hoax because they bought us free beer."