I don't really like this concept, but I do like this guy and his other work.
What I don't like:
It isn't obvious that there are other thumbnails other than the first one. If a user wasn't aware that there are other thumbnails to view they would never think to hover over the image.
Your critique seems to be focused on the wrong details. The author was not demoing their ability to indicate there is a mouseover action. They were indicating their ability to create a compact, intuitive (once hovered) technique for browsing thumbnails. Your issue can be fixed in a number of obvious ways, but the behavior once activated is a non-obvious contribution.
You're right – the intent is to demo the interaction when hovered and I did not spend any time designing the resting states. If this were to be used for something like a gallery thumbnail I think it's perfectly fine to not promote the hover preview at all. Users would discover it naturally as they mouse over to click on the thumbnail.
However if it's important the user discovers what's in the stack, this could be communicated visually like http://cl.ly/image/1c041l2e1S0O
I think an obvious stack (perhaps even more obvious than depicted in your screenshot) would help. Another thing you could consider is having the stack give a little more affordance as the mouse pointer approaches. Perhaps it could expand a little to indicate "hey, there's a behavior over here!"
Sure. One would be when you mouse-enter, a small circle or bar appears that fills in as you hold your mouse there, indicating something will happen once it becomes full. Another would be to have the other thumbnails "peek" out on mouse over, which provides the user a place to click to activate the browser mode to see them.
I love your second idea; nice one. :) (Not sure how to make it work for mobile, though, unless you have it "peek" out all the time.)
The first reminds me too much of dcurtis' "Kudos" circle, though, where something happens because you left your mouse in the wrong spot for too long; it's nigh-infuriating sometimes.
What I don't like: It isn't obvious that there are other thumbnails other than the first one. If a user wasn't aware that there are other thumbnails to view they would never think to hover over the image.