UPDATE: SpaceX has removed this video following the unveiling of their Dragon V2 capsule, which has a markedly different construction than the version 1 shown in this animation previously making the descent and soft landing. To see V2, go to: http://jsbrookspresents.blogspot.com/2014/05/dragon-v2-unveil-may-29-2014-at-10-pm.html My apologies for the inconvenience!
The SpaceX gang is getting ready to move on to the next stage of the Dragon's development. As you can see from the simulation, the idea is to make return the Dragon capsule (currently the only capsule that can carry cargo and experiments both to and from the International Space Station) and now they want to take it to the next level. The idea is to return the capsule to land riding pillars of fire back to the ground for a soft landing. At first, parachutes will augment the landing ... eventually only the rockets on the capsule.
In time, if this system works properly, the idea will be to convert this next phase of Dragon capsule into a crew module that Elon Musk ... in some future iteration ... would like to see go to Mars and back.
To make the SpaceX rockets more economical, the idea will be to have every stage return to the ground using this landing system, landing on legs on the ground, to be refurbished and reused. It's an exciting possibility. I hope they make it work.
For additional blog posts on SpaceX and their spacecraft, see: http://jsbrookspresents.blogspot.com/2013/03/spacex-dragon-launches.html, http://jsbrookspresents.blogspot.com/2012/05/spacex-boldly-looks-to-blast-millions.html, http://jsbrookspresents.blogspot.com/2011/09/spacex-chief-details-reusable-rocket.html, and http://jsbrookspresents.blogspot.com/2011/08/spacex-on-mars-saving-human-spaceflight.html
NASA is moving forward with Mars plans as well, see: http://jsbrookspresents.blogspot.com/2014/05/nasas-path-to-mars.html
For more on the SpaceX Dragon from SpaceX, see: http://www.spacex.com/dragon