As you can see, the idea here is that a rocket plane will be towed up to  20,000 feet, after which the tow will be released and the space plane "Astroliner" will start its engines and proceed to its designed height. so far, I'm not clear, from the details on their website, what the X-Prize vehicle is. The website talks about a two-stage spaceplane with an expendable booster, which is for orbital flights. Perhaps what is being shown here is the space plane without the lower stage, and, therefore, only enough power to execute a sub-orbital flight, and qualify for the X-Prize, since the whole system, in this configuration is completely re-usable. The Astroliner is quoted as being able to put 11,000 lb into a 100nm orbit. The engines are given as conventional liquid oxygen and kerosene.

The Kelly team appeared to consist of 7 people, by a photo on the X-Prize site. There is no team briefing to download, and it is not at all clear from the website what progress has been made on the X-Prize attempt, if any. The press releases just talked about awards, of substantial amounts of cash, for contracts to do studies. There was no projected programme for the X-Prize attempt, but now, Kelly Space is pursuing various aerospace business strands. Click the logo, below, to go to their website. As of 2009, they are still very much in business.