In terms of differences to the OU process this will be based around a real-time element. It will be a taught degree; there is an attendance requirement however it is not campus based.
In response to the OU not being respected I think the tables have very much turned on the old negative attitudes. The OU scores very highly on teaching standards, student satisfaction, and pass rates. The grading system has higher thresholds than most UK campus based courses, and a number of large UK companies now pay to put employees through OU courses. It's a high commitment, high effort option, and not for the faint hearted. I am surprised the OU hasn’t presented a course based around the real-time element themselves.
This move from Essex, in my opinion, can only be a good thing. University life is not geared to the alternative student market (and don't believe the marketing blurb stating otherwise), if you aren't 18 or thereabouts attending a regular course may well be extremely frustrating (I speak from experience on this) not due to coursework, but due to a total culture clash between someone who has been out in the real world and the average devil may care student. Banging my head against a brick wall would have caused less pain!
I totally disagree that this will be a dumbing down measure. Of course in the initial stages you will get the odd muppet who thinks it will be an easy option, but they will soon be weeded out. The level of focus required to study independently is intense (ask any OU-er) – it’s the same kind of process full-time authors/freelancers go through, you have to have drive far greater than a lot of people could manage.
I only wonder why it has taken them so long.