Although the two week limit and Saturday night stay do seem somewhat restrictive, I think they may have a good product. The majority of flights that I book on points (for vacations) are booked well in advance of two weeks for availability. The price cap doesn't seem to be a major factor as Toronto-New York two week advance purchase doesn't normally cost over $400 (at least in my experience). This will probably more of a factor in smaller cities where it costs a fortune to fly into (like Castlegar where my brother-in-law lives!)
The only thing I think I'd miss would be the convenience in being able to do a rush booking and I'm pretty sure on these tickets that no changes will be permitted.
It will be interesting to see which airlines will be involved.
So what we know so far is:
1) 2 week advance purchase
2) Certain price limitations (but reasonable)
3) Saturday stay required
4) 15,000 points short haul domestic
5) 20,000 points short haul U.S.
6) Additional purchase protection warranty and 90 day replacement coverage.
It would be interesting to calculate how similar the 'flying' benefits are to the Air Miles credit card.