Marty,
Yes, I think that may be the next evolution - a hybrid between kiting and paragliding. You noticed the hanglider controls on his wing. He was using a Flysurfer kite and then rigged PG controls. I have seen a few other similar videos on the web. Flysurfer is working on a "parakite" that they are calling the Skycarver. I don't know when they will introduce it. The kite designer at Flysurfer, Armin is also a PG pilot and he is working to bring the safety of PG to kiting. It would be awesome to be able to glide over the snow with safety systems that were designed for flying.
I see limited application on the water for a parakite because you need a hill for the uplift. However, on snow it would be sweet.
Check out the other videos by this same guy. He has one on the sand that is better than the Cape Verde video IMHO. He also has a really odd one where he tethers himself to a hydrofoil allowing him to fly over the water. He calls it Seagliding.
Kenny