Time for an update as the Skylons engine intake condenser goes on test.
I have very little idea how well these tests might be going only that they are key to the entire projects success.
One thing I can say is that the original plan was to compress and cool very thin high altitude air until it becomes liquid so that it can be fed directly to a liquid propellant reaction system and thus far they have, so I believe, only managed to reduce it from the very high compression temperatures to near 0 Degrees Centigrade, but it's a start.

With thanks to Jamie for bringing this to my attention.
Key tests for Skylon spaceplane projectJonathan Amos Science correspondent
UK engineers have begun critical tests on a new engine technology designed to lift a spaceplane into orbit.
The proposed Skylon vehicle would operate like an airliner, taking off and landing at a conventional runway.
Its major innovation is the Sabre engine, which can breathe air like a jet at lower speeds but switch to a rocket mode in the high atmosphere.
Reaction Engines Limited (REL) believes the test campaign will prove the readiness of Sabre's key elements.
This being so, the firm would then approach investors to raise the £250m needed to take the project into the final design phase.
More here
http://www.bbc.co.uk/news/science-environment-17864782