This is old news to me. I saw a documentary once on technology similar to this. A handicapped lady was able to steer the mouse on a computer by thought alone. Another guy used it for writing (thinking the letters, much like described here). They were not in an MRI scanner while doing so. Their brain activity was measured in other ways.
I'm not worried about misuse of such technology, but I'm not scared of the government either. No government ever hurt me and I can't see any obvious reason why one should. This technology can really help a lot of people, though, such as allowing handicapped people to control computers or robots with their minds to do work for them .. For example to talk for someone who's lost the ability to do so.
ex :
Here's something more related to what I saw :
It's not creating images on the screen, but yeah - related.
