My kids and I actually had the first successful test flight of the sub-$1,000 UAV two weekends ago, but I haven't had time to edit the video properly until now. The good news is that a) it didn't crash, and b) it works. We tested stabilization, autonomous navigation (only using compass headings this time, although GPS is in the works), and the real-time video downlink. Everything worked well enough that we're able to see what we have to improve, which is the definition of a successful test.
Here are some video clips from that flight (we're still getting the hang of filming a small plane in flight, so please forgive the distance and shakiness, too): The only thing you can kind of make out about the flight characteristics in the brief part where the you can see the plane in the air is the distinctive "crabbing" behavior as the autostabilized ailerons fight the autopilot-steered rudder. This is normal and is just an artifact of the way I designed it, with stabilization and navigation as two separate systems that don't communicate with each other. It still turns as intended, it's just a little graceless about it.
Finally, a word on why we're doing this.
The main aim of this project is to both make the world's cheapest full-featured UAV and the first one designed to be within the reach of high school and below kids, as a platform for an aerial robotics contest. Like the Lego FIRST league, but in the air.
But there is another aim, which I ended being asked about a lot at Maker Faire. At the moment the FAA regulations on UAVs are ambiguous (we believe that by staying below 400 feet and within line-of-sight we're within them). But there is a good deal of concern that as small and cheap UAVs become more common, the FAA will toughen the rules, making activities such as ours illegal. I hope this project will illustrate why that approach won't work.
By creating a UAV with Lego parts and built in part by kids, we haven't just created a minimum UAV, we've created a reductio ad absurdum one. If children can make UAVs out of toys, the genie is out of the bottle. Clear use guidelines (such as staying below 400 feet and away from tall buildings) would be welcome, but blanket bans or requirements for explicit FAA approval for each launch will be too hard to enforce. The day when there was a limited "UAV industry" that could be regulated are gone.