Hmm... I believe, in a book I have on fluid dynamics, this type of effect is discussed.

There was an aircraft that had a sort of 'paddle-wheel' design to the leading edge - which greatly reduced drag and improved lift.

I believe there has also been some research into ducted exhaust from the engines through slats on the upper trailing surface of the wing to counteract the chaotic boundary layer (reduce drag, improve lift, improve performance - good stuff, spare for the high temperatures of the jet exhaust and potential buildup of exhaust particles).

I am not too familiar with this - but there are probably several influencing factors. First - a hovering jet-liner just doesn't sound like a good idea. You have a lot of surface area for ground-level winds to pick up and toss around.

Though it does seem like this sort of thing would be useful in a helicopter design. It just may not have ever been able to be developed and refined to match the performance of conventional methods - or simply was seen as 'too new' to really be used.

Looks have a lot to do with things - wouldn't be the first time a perfectly safe, practical, and better solution gets passed up on the sake of it looks scary or unsafe.

Yeah honestly it looks a whole lot safer and simpler than tilt-rotor designs.

Toreishi, I was thinking more about the type of aircraft demonstrated in the second video - but I had also seen the type of design mentioned by your first.

They seem to be operating on two completely different principles, however (well, aside from the idea that faster moving air has a lower pressure than slower moving air).

I'm not exactly sure how related the aerodynamic principles are to the OP, though.

On that note, the thought just struck me that the idea may have been abandoned due to problems when approaching supersonic velocities. This could be controlled a little better in an aircraft utilizing this as a drag-reduction method - but if there are problems with it when approaching supersonic velocities, then it really would limit practical use on a helicopter-like design by restricting length and/or angular velocity.

I am not saying that is/was an issue - but that it may have been one they ran into once they got into later testing phases and actually got it into a supersonic wind tunnel (or just ran into with scaling up their design).