Their Autonet plan would center around ad hoc networks of vehicles and roadside monitoring posts supported by 802.11 technology (the prototype uses 11b). The vehicles would essentially be the "clients" in such a system and feature graphical user interfaces to pass along information to drivers. They're building the system to be able to handle data on thousands of traffic incidents and road conditions.

The effort is among a number of such projects to address vehicle congestion via wireless technology. Wireless researchers at also have collision avoidance in their sights. MIT's CSAIL outfit also is big into examining the role mobile sensors could play in smoothing car traffic. http://publications.csail.mit.edu/abstracts/abstracts06/balakrishnan/balakrishnan.html

As for the California researchers, they've described their work in a recent issue of the International Journal of Vehicle Information and Communication Systems. 

One challenge is that not many arterial road intersections have any sort of electronic surveillance system that could be used to convey information about traffic hotspots.

"Even if every highway were fully and accurately monitored, drivers attempting to plot an alternative route around an incident would have virtually no information about conditions on the arterial street network," according to the researchers.