Summary here if you haven't heard about it.
The work comes out of PERI - these are Post-Keynesian types really flexing their muscles. Austrians are interesting, but I do think if you want a serious heterodox contender you have to look to the Post-Keynesians rather than the Austrians.
Anyway - my advice is patience on this. It will be interesting to see Reinhart and Rogoff's response. A major issue seems to simply be a coding error, but there might be different reasons for making some of the other decisions R&R made. It's worth hashing that out.
It is troubling that some of the successful years left out seem to be in the heyday of demand management.
UPDATE: An initial response is here (HT - Ryan Murphy). Scanning I don't see a reference to the coding error. A lot of it makes the very reasonable point that a lot of the general story is preserved, and it's found by other authors. This part bothered me a little:
"Note that because the historical public debt overhang episodes last an average of over 20 years, the cumulative effects of small growth differences are potentially quite large. It is utterly misleading to speak of a 1% growth differential that lasts 10-25 years as small."
True enough, but the whole point is that the gaps close considerably when you correct the coding error, from a difference of 3.3% to this difference of 1%! So yes, a 1% difference is still a big deal when we're talking about growth, but if you're going to knock the PERI authors on that count than you have to also acknowledge how huge it was for them to close that gap by two thirds!!!
It's not surprising that R&R would lash out like that. This has caused a huge uproar, after all. But this criticism doesn't seem quite fair.
The other thing this response notes is that they were never making a causal claim. Indeed the original book was very clear about the crisis-to-debt causal arrow (something I and anyone who's ever read the book can easily verify). This is an important point. As Jonathan Catalan notes in the comment section here and Krugman notes in his post on this, the real problem is the politicos that took the 90% threshold and ran with it.