Ideally this watch could be paired with a smartphone or some other mobile device, thereby reducing its weight and cost, but PlasticLogic is clearly contemplating that this watch could be used as a fitness tool like the MotoActv smartwatch from Motorola Mobility.
And that is just one possible use. The relatively high resolution black and white display in the watch face is more than capable of displaying complex content like navigation information, images, weather info, and more.
And as you can see in the video, PlasticLogic has come up with a clever way to get around the problems of putting a color filter on top of a black and white epaper screen.
It might not be obvious in the video, but this watch is using a very simple color filter. Each segment of the ring of color that surrounds the watch face is only able to show a single color. The green segment can only show green, red segment can only show red, and so on. This lets the filter show a much stronger color without a gray undertone.
This watch is an excellent example of a smart way to use an epaper screen. when inactive it uses far less power, and when seeing heavy use it still offers more than enough detail to convey useful info.
P.S. The watch shown above is PlasticLogic's second design. Here's a video of the design that they unveiled in May 2012: