Here is video confirmation that it can be done:
http://evworld.com/EVWORLD_TV.CFM?storyid=1719
Apparently they use "stealth mode", where the engine is still turning, but is not fed fuel. I'm a bit uncomfortable with this, as it means that the cylinder walls and piston rings are wearing away needlessly. (Edit: I assume that they have control of the valves so you don't get compression deceleration when driving.) The engine can come on at any time, but it could do that from zero RPM anyway. In the demo, they had to accelerate slowly or the petrol engine would come on. When set up correctly, the engine comes off as soon as it is not needed. (In the videod demo, this part possibly wasn't set up yet).
For those that need a range extended EV, this could be a really interesting option, which can be had right now at a reasonable price.
I'm still trying to find the article I was reading some months ago, where the speed relationships of the two motors and engine were explained with graphs. The "overspeed" problem that usually limits EV mode to 60 km/h must be to do with MG1; it's the one that can start the IC engine (by spinning backwards? Not sure.) MG2 is essentially connected to the diff input. I think it must be "designed" to spin at higher speeds than the other one. So when a Prius is converted to pure electric, I think they just use MG2 and ignore MG1. That seems a terrible waste.
Edit: metrificated. Now if only I could change the topic title...
Edit2: Doofus, you CAN change the topic title
