Take a look at the launch from the point of view of the vehicle itself, where it successfully roars into space and later separates from the first stage. But then the second stage begins to sway back and forth and glow a hot red toward the end, with the video ending when contact with the vehicle was lost 5:05 into the launch. It was later determined that the second stage had failed.
Still, the launch was a good indication that the company can actually send a spacecraft into space, which is generally considered to be around 60 miles high. It remains to be seen whether the company can send a spacecraft into orbit, a crucial capability. The flight was certainly more successful than that attempt a year ago, which ended in failure as it careened into the ocean. Take the jump to see that mishap.
Apparently the company has learned a lot in a year. On its website, SpaceX says yesterday's flight proved 95% of the Falcon 1's systems. This test brings SpaceX a step closer to its goal of lowering the cost of space flight by a factor of 10.
SpaceX foresees no delay in the launches for real customers it has planned for later this year: one for a Department of Defense satellite set to launch in late summer followed by the launch of a Malaysian satellite planned for this fall.