So the machine takes the same picture, but simply pre-processes it into a cartoon image using "Advanced Imaging Technology" (now there's a hilarious non-description) before throwing it up on the monitor? Where do the originals go? Do they ever get audited or offloaded for quality control purposes--how else can they expect to be sure the algorithm works?
The news reports on this switch are all over the place in terms of quality, and you happened to pick one of the worse ones. I'm not the only one asking these questions: http://www.cnn.com/2013/05/29/travel/tsa-backscatter
"We'd like to see clearer rules about the collection of the images," Rotenberg said. "Are they deleted? Are they saved? Is some analysis being done and can they be linked to passengers?"
Not to mention the enormous waste of money it must have been to install and then remove the old machines. And what now happens to all the pictures they took, which are probably accumulating dust on some DHS subcontractor's hard disk somewhere in America?
I have no idea how it is actually implemented, but it seems like it could be implemented in a perfectly acceptable way.
The first step is to define what acceptable is. As I do not understand why nudity is unacceptable in the first place, I will not attempt to do so, and will instead employ the time honored tradition of hand waving.
In the new system, a reasonable implementation would be to discard the original image imidietly. Quality control can be done by putting the machine into debug mode and using consenting individuals as test subjects (or seeing if the cartoon image detects when the target things are present). There is also no guaranteed that the old pictures were ever stored. Although in both cases, I suspect they would store the data, in some form, for at least the short term to assist in a post-hoc analysis if their is a security failure.
Also, I think it was a software update only, the machines are still the same.
You are sure all the scanners, or even most of them, have been updated and that they don't fall-back to showing detailed nude images? The TSA wouldn't lie, right?