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Thanks for the link!  Here are some interesting quotes from that article:

Tata's involvement this time around, combined with the fact that oil recently hit $100 a barrel, could change the game. India's largest automaker announced last February that it had struck a deal with MDI to further develop and refine Negre's compressed-air engine technology, with the intention of producing and selling the emission-free cars in India. It has since been reported that Tata invested nearly $30 million in MDI as part of the agreement.

MDI says that in air-only, zero-emission mode in urban settings, the car has a range of up to 125 miles, but that drops to about 50 miles when it is driven at faster speeds up to 60 miles per hour. A full charge of air, including the electricity used to compress it, is expected to cost less than $3. In the dual-mode version, with assistance from fuel, speeds can reach 100 miles per hour, and range expands to 900 miles on less than a gallon of fuel (although the faster one goes, the shorter the range).

The Air Car may do better than fuel-cell cars, but experts say that using grid power to charge a battery-powered electric vehicle is much more efficient than using electricity to compress and store the same amount of energy in a tank. \"The main problem is that air gets hot when you compress it, so much of the energy input goes into raising the temperature of the air as you try to raise the pressure,\" explains Doug Nelson, a professor of mechanical engineering and an expert on advanced vehicle systems at Virginia Polytechnic Institute.

At the core of all CAT models is a four-piston engine powered by compressed air that is stored in tanks at 4,500 pounds per square inch. The lightweight tanks, a thermoplastic container surrounded by a carbon-fiber shell, are made by Airbus Industries and hold nearly 3,200 cubic feet of air.

To propel the vehicle, compressed air from the tanks is injected into a small chamber, where it expands and cools. This expansion drives a downstroke of the piston. But as the ambient temperature begins to reheat the air in the first chamber, that air is forced into a second neighboring chamber, where it expands again to drive an upstroke. Using ambient heat helps capture more of the energy in the compressed air, ultimately improving the efficiency and expanding the range of MDI's Air Car. And compared with four-stroke combustion engines, in which half of the strokes are wasted to pull air and fuel into the chamber, the air engine makes use of every stroke.

To increase the range of the vehicle, MDI is also coming out with an optional dual-mode system that allows the car to run on fossil or biofuels–either when its speed exceeds 35 miles per hour or when the compressed-air tanks are empty. When in fuel mode, the car's moto-alternator refills the tank with compressed air as the vehicle moves.

 It also states that the air pumps that are currently at gasoline stations (in North America) would not work to refill the tanks.  For this concept to take off on a mass-scale there would need to be an infrastructure of air-compressors.

According to MDI's ** you don't have permission to see this link ** there has already been around 11,000 \"intention-to-purchase\" orders completed online for its selection of air vehicles.