New work is underway in a collaborative agreement between the Juvenile Diabetes Research Foundation and Novocell, Inc on this very venture. Study specifics can be found here. Here's more about where Novocell's got most of its funding.
(Pictures courtesy of Novocell's web site)
Now don't tell me stem cell research isn't a good thing.... I just hope if the subcutaneous approach doen't work, that they try an intraperitoneal approach (in the belly cavity). Prior work with insulin pumps that used ultra-short-acting insulin showed the intraperitoneal approach was superior to subcutaneous insulin injections at minute-to-minute control.