A Couple of Guys, a Girl, and an Armadillo named 'Widget'

That's the team at Armadillo Aerospace.

Armadillo Aerospace is a small research and development team working on computer-controlled hydrogen peroxide rocket vehicles, with an eye towards X-Prize class vehicle development in the coming years.

For what they've been able to achieve so far, just have a look at the video (7 Mb) of a rocket vertical take-off and landing. From the accompanying news release :

Analyzing the telemetry told us the following:
[..]
The auto-land worked perfectly. I had tried several algorithms on the simulator before settling on this one, and it behaved exactly the same in reality, which is always a pleasant surprise.

There's still an awfully long way to go: obviously, thesting the larger version, a vehicle capable of more than 15 seconds of flight, to get it to a decent altitude and back. Then there's the problems of re-entry. But one of the major hurdles has already been overcome, one that many teams spending many millions of dollars haven't always been able to clear before. The team may be small, but they're not just Rocket Scientists, they're real Pros.

As for the X-prize itself?

I think Space Ship One has good odds of success in the single-person-to-100km flight. I only see two real issues they may hit: The extended burn above the atmosphere may run into some control issues as the nozzle ablates, which will be hard to correct with only cold gas attitude jets. This would be a fairly benign failure, with the pilot just shutting off the main engine if he can’t hold the trajectory. The dangerous part of the test will be the reentry with a significantly bigger drop than the previous test. At this point, I hope Burt has everything work[ed] out and he is able to make the X-Prize flights soon, because our prospects are pretty dim for getting everything working perfectly in the big vehicle in five months and having permission to fly it. I certainly don’t want the insurance company to keep the prize money. If Space Ship One crashes, we will probably throw ourselves at an attempt, but it will be a long shot. No, I don’t think any of the other teams are close.