Here is a Vimeo Demonstration:
Here is My Blog Post:
If you want to test this, the launch url is:
http://khan-blti.appspot.com/launch
You can test it at the IMS Test LMS:
http://www.imsglobal.org/developers/BLTI/lms.php
The key and secret used in that form do work - so you can test from anywhere.
Let me know (and send images) once you have tested it.
/Chuck