It's very controversal.
Makes sense in Europe - if you've been there, you can understand why it's a valuable safety regulation. But it's devastating to sports car makers, especially specialized smaller shops (as the article suggests). Companies like Benz are working on exterior hood/grille airbags, but small sports car makers probably couldn't engineer such technology into their cars, and it would go against the whole spirit of the simplistic sports car.
Obviously this will have an impact around the globe. I don't think automakers will graft special front-ends on cars only for Europe. They could, or make modest detail changes, but nothing significant. European design has traditionally been trend-setting, so it'll be interesting if the pedestrian-friendly fronts will be made fashionable, or if purchasing a vehicle that is not pedestrian friendly will be considered a social faux-pas.
I didn't know the timeline regarding current cars on the market (no redesign needed till 2012). But I know carmakers are rushing their last swoopy efforts to market ASAP before '05 rules take effect. Hope they design the things properly, or it'll be recall city.