Read the ****ing page posted - most of your questions are answered.
Yes, the Germans built similar engines for the V1, however in those the fuel wasn't detonated, so it's efficency was ~5-10% of what a PDE would be capable of.
It's greatness if operating a lot more efficiently than turbofan engines (except for high bypass turbofan engines) even at high speeds - which is only achieveable with afterburners BTW so no wonder it's more efficient.
On the other hand I'm not convinced so far that mechanically this system would be just as reliable or cheap to run than a normal jet engine - though it DOES look promising.
Also note, that Ram- and Scramjets are still the way to go for higher speeds.
This looks really promising.
http://en.wikipedia.org/wiki/Jet_engineWiki never lets you down.
EDIT - added diagram and lick to wikkipedia article.
