The creator has a working prototype of the VM2 on display in his Youtube channel that shows some of the various functions it can do
Here is a bit of information right from his website that details the goals of the VM2
"Externally keeping it as closer to the original design as possible, but internally with new electronics and upgrading its original functionality:
New monochrome LCD with backlight : Switchable from the user if desired, for battery saving
Higher screen resolution: the user will be able to select between original (48x32), or 2x scaled (96x64)
micro SD storage : with the use of an SD card, the user will have almost infinite space to store all virtual VMUs. This refers to either VMUs with normal save data, or VMUs with mini-games. They can be organized into folders (i.e. per game) or just put everything in the root of the SD. The current VMU file to be used will be selected from the VM2 menu. If the selected VMU file contains a mini-game, then it can be played - like with an original VMU.
Internal storage of 1x VMU : In case that an SD card is not used, the VM2 will still be operational with its internal storage of 1x 128Kb space. In case an SD card is used, then both storages will be available to the user. Again, the current VMU page (or file) to be used will be selected from the VM2 menu.
Embedded High-capacity LiPo battery : This will replace the 2x coin-batteries and provide longer operation time
External charging : The VM2 will charge either from its micro-USB connector, or from the controller while playing
PC connectivity : The VM2 will be able to connect to a PC from its micro-USB
Memory management : Connecting to a PC and using a custom GUI, the user will be able to backup/restore the internal (1x) storage. In case a micro SD card is used, then it will be simply managed from any OS explorer for copying/moving/organizing its contents and files. All files will be in the format of a full VMU dumb (.bin, .vmu) - compatible with almost all existing software and emulators (i.e. VMU Explorer, ReDream, etc.).
UPDATE: Based on the invaluable community support & feedback, here's a list of new additions that I was asked for:
Original cap reproduction : The VM2 will come with our favorite(!) original protective cap
Beeper support : The user will have the option to enable/disable the original audio beeping
Battery connector: The VM2 will make use of common JST battery connector for easily remove & replace
DreamEye support: VM2-GUI feature to extract DreamEye camera photos from save files and store as JPEG
Language support: The user will be able to select between English(US) and Japanese(JP) language"
Here is the youtube link
https://youtu.be/rkzMtDA4yqU