Additionally, Digg - the product, like HN, Reddit etc was never going to be a substitute for Reader. The product they are currently working on sounds like a direct replacement for Reader with a social slant. Seems like the most sensible move for them to become relevant again.
When Prismatic came out with an opportunistic spiel, even though they had nothing anything like Reader, it really rubbed me the wrong way. This hype piece feels the same, almost like a car commercial (bare bones! ultra fast!) or an Onion piece about how every co-founder in the Valley is starting a social news sharing service.
I think the key ingredients to a GR replacement are an open API so it is not beholden and can be on all your devices -- as mindcrime notes -- a focus on RSS, basic and friendly sharing, and then surely a little curation magic that Digg must know already. It's probably fine if Digg gets there in a few months. But for example theoldreader is there already.
2) The linked "Follow Our Progress" form is for email updates
3) Their tumblr blog has no rss link
That's not what I call serious. I use their site all the time, but it's no substitute for GR, and I don't want their curation to overpower my feeds. Reader was all about the RSS. At this rate they are sounding like a tardy Prismatic.