Behold the first test of the Falcon 9 Reusable rocket, launching and then smoothly landing in another location -- an entire rocket going up and landing back on Earth ready to be refilled and launched again. Unlike the Grasshopper, this thing is huge! It is so amazing that I squeaked like a little girl when I saw it in action.
F9R lifts off from a launch mount to a height of approximately 250m, hovers and then returns for landing just next to the launch stand. Early flights of F9R will take off with legs fixed in the down position. However, we will soon be transitioning to liftoff with legs stowed against the side of the rocket and then extending them just before landing.
Basically, this thing is a Falcon 9 v1.1 first stage with legs. Soon they will be testing at higher altitudes, in SpaceX facilities in New Mexico. When they do that they will be able to turn off the main rocket and guide the F9R down unpowered "to prove out landing cases that are more-flight like."