According to the DHS:
The technology will be tested at a simulated port this spring. By July 31, 2005, the testing will begin at the ports of Nogales East and Nogales West in Arizona; Alexandria Bay in New York; and, Pacific Highway and Peace Arch in Washington. The testing or “proof of concept” phase is expected to continue through the spring of 2006.
I know nothing about the details of this program or about the security of the cards. Even so, the long-term implications of this kind of thing are very chilling.