Hi Andrew,
They have an explanation of the engine design here:
http://www.reactionengines.co.uk/sabre_howworks.html
I'm sure you'll understand it better than I do
I can't find many details but I believe they tested a full sized precooler in 2012 and it was successful in cooling the incoming air from 1000c to -150c. However I don't know how they heated the air and under what conditions it entered the precooler, and I'm not sure how long the test ran for. This was the testing that was overseen by the ESA propulsion experts and its success was required to achieve the next round of government funding, which they got.
The next milestone is for them to build a complete sub-scale engine with precooler and to run it in simulated flight conditions.
I certainly understand your skepticism though as it's a pretty difficult machine they're trying to build, and they're certainly not the first to claim they've invented the next-big-thing
