I hope that this technology does not sacrifice meaning for the sake of hitting some arbitrary reading speed. Not widely recognised is the fact that the English verb operates under an 'exclusive OR' decision condition. Verbs can relate to the 'past' or not the past - called the 'non-past.' If this does not match the verb's tense, of which there are only two, the 'past' and the 'non-past,' then there is a subliminal message as to how the writer wishes the reader to regard the verb.
For example, Bob Seger has a song, 'Against the Wind.' in which is found the following: "I wish I did not now, what I did not know then." Both verbs have the same words, but, thanks to the Ex-Or decision, their meaning is opposite. It is essential that children absorb that mechanism, otherwise they will learn to answer the question: "Could you open the door?" said by someone with their arms full, with: "Not until I was tall enough."
Reading words in isolation might just prove harmful to the learning process..
Secondly, there is the question of non-fiction. Sometimes one has to go over the same text again slowly in order to absorb the information that is being presented. I think I would get cross with having to manage the system so that I can go over what I want to re-read and not what the system thinks I want to re-read. Furthermore, sometimes I wish to compare texts from different parts of the page, or even the book, in order to cross-check. This could lead to having the need for two Kindles, or whatever e-reader one is using.
In summary, o,k. for adults accessing fiction, or text messages, but otherwise, it is an unwanted solution looking for an imagined problem.

If the one word window box could be in conjunction with a window containing the paragraph being read at the time (maybe with the possibility to zoom in and out), then it would be easy to jump back and forth in the text by simply pointing. I hope to be able to beta-test this service.

@Mel Tisdale, I agree. "Getting" all the words is not the same as "getting" the information and knowledge being conveyed.

Wordflashreader (amongst others) is already available.
http://wordflashreader.sourceforge.net/#overview
Its a free download - and having had a quick try it does seem to really work. Not so much reading as just letting it register.

It would not be appropriate for situations in which one would want to linger on a writer's way of saying things, but for getting information into the brain it should be fine. Would it not be even faster if phrases were shot at you rather than individual words?

I think this is a very good idea for many people, but I personally read at more than 1000 words a minute already, have since I was in middle school, so I doubt it would help readers who are fast already. But, I think they should find out by including fast readers in their study groups. For example, for fast readers, I do NOT think it will help to break up long words - I found this significantly slowed my reading - so there should be an option not to do that in any commercial version.

Agree with comments that this would be most annoying when deep, serious comprehension required. Prob ok for short trivial matters.

I'm concerned about the eyes not getting enough exercise if you are looking straight ahead during the entire read, rather than moving across the page from left to right and from top to bottom. What is there to compensate for this?

There is already speedreading, which President JFK used for reading James Bond books and who knows what else. Electronics allow Spritz (gimmick?) and other devices to make unnecessary the brain and eye muscle efforts that went into speedreading. And there will be more such devices, methods, systems, and software programs. Surely, it will be worthwhile to many, and perhaps detrimental to others. The collective balance in human value will be up to us.

For Information: I read entire paragraphs at a time when I'm scanning a page for relevant information--this would hinder me.
For Fiction: A modest and variable rate of reading is the point of fiction reading, right? It's a scenic journey, not a race.
Perhaps this could be useful for hard-core info retention--since you have to focus your whole attention not to miss a word.