Does this ARG look at lot like "Skills and Powers"? It dose to me. And skill and powers was the worst version of the D&D.
I'm going to go ahead and assume that no, it's nothing like Skills & Powers. These aren't rules for choosing your own racial abilities from a list; most of the book is about expanded racial options, like Advanced Player's Guide was for classes. The playtest chapter is made of rules for designing your own races, and appears to be targeted to DM's.
And Skills & Powers was the best version of D&D. More flexible than any other version of the game ever, and far less broken than 3.X.
I agree with Viktyr that Skills and Powers was far and away my favorite D&D.
Once I got that, I never played default AD&D again--Rangers with Backtab was my class of choice and I loved the flexibility it gave my PCs when I ran it.
But no, I don't think this looks anything like it. I don't think anyone could do a Skills and Powers version of 3rd edition, because it would require showing the math behind "balancing" the classes that WotC supposedly did, and everyone will see that it was half-assed at best.
Does this ARG look at lot like "Skills and Powers"? It dose to me. And skill and powers was the worst version of the D&D.
Actually it is reminiscent of Skills and Powers, only that that book extended into class-building and whatnot. The thing about 2e is that every book is crammed with flavor and fluff, not just a smorgasbord of dry mechanical options. The ARG playtest document is so jammed that I can barely even stand reading it!
Just as an example, here is a smidgen of mechanics (without revealing the system too much):
Dwarven Abilities A character with leftover character points may select additional racial abilities after taking one of the standard subrace packages. Or, if the player wishes to create his own customized dwarven character, he can pick and choose from the list of dwarven abilities listed below. Abilities cost either 5 or 10 character points; refer to the descriptions below.
• Axe bonus (5): +1 to attack rolls with hand or battle axes.
• Better Balance (10): +1 to the Balance subability score. This allows a dwarven character to have more than a 4 point difference in the Dexterity subabilities.
• Brewing (5): +2 to the Brewing proficiency score. The dwarf must have this proficiency to gain this benefit.
• Close to the earth (5): Dwarves with this ability heal faster in subterranean settings. When this character is underground, he heals 2 points of damage overnight rather than the 1 point normally healed by other races. This bonus does not apply if the character is above ground.
There are also rules to customize the following monstrous races:
Aarakocra, Alaghi, Bugbear, Bullywug, Centaur, Flind, Giff, Githzerai,
Gnoll, Goblin, Hobgoblin, Kobold, Lizard Man, Minotaur, Mongrelman, Ogre, Orc, Satyr, Swanmay, Thri-kreen, Wemic.
Here's a couple of abilities for the more monstrous types:
a. Charge Attack: The creature is capable of making a charge attack, gaining a +2 bonus to attack and inflicting double damage with an impaling weapon such as a spear, javelin, or lance. Aarakocra perform a diving attack, centaurs charge like knights, and bullywugs leap at their enemies.
b. Move Silently: The creature can move silently, as the thief ability, with a base success of 40%, +5% per level.
c. Hide in natural settings: The creature can hide in natural settings, just as a thief can hide in shadows. The base success chance is 35%, plus 5% per level. If a flat percentage score appears next to this ability, use this score instead; for example, a satyr’s abilities include c(90%), which means that a satyr has this ability with a 90% success chance.
There are also a plethora of subraces (like dark elves).
I do not believe there are rules for creating races from scratch (that's in the DM guide anyway!), but these rules could easily be used to eyeball such things. It's funny, what a lot oldschool gamers hate about 2e, newschool gamers love about PF... go figure!