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They claim that the effect can only be produced when the vehicle is moving downwind, so that means the vehicle is riding in what would appear to it to be in zero relative wind, so there would be zero wind resistance as the vehicle moves downwind powered by the propeller, which is powered by the rear wheels, which are turned by the forward thrust of the propeller, etc., etc.

I watched a different video on this same subject a couple of months ago, and it did a better job explaining how the process worked.

Sailing ships can tack downwind faster than the wind can blow. The propeller blades are just exactly like tacking sails in how they interact with the wind. This gives the blades a velocity greater than the wind speed.

The hard part to grasp is the reference frame, but the mass of the air is still moving even if it is slower than the vehicle, and it is still imparting forward motion to the blades at greater than wind speed.

I've seen that as well, but the treadmill model, which was the only basis for the bet payoff, doesn't use this form of "rotary tacking" of the propellers. Forward thrust of the propeller moves the vehicle against the direction of the treadmill, and the wheels spin, providing more power to the propeller. No wind motion whatsoever is involved.

Sailing ships can tack downwind faster than the wind can blow.

Oh, and you meant to say that sailing ships can tack upwind faster than the wind can blow. Which is true. Especially low drag sailing craft like catamarans, the new America's Cup flying aquafoil designs, and ice boats, can travel much faster than the wind is blowing, but do so at a quartering into the wind, not directly downwind.

This vehicle claims that it is the only wind powered vehicle that can travel downwind faster than the wind is blowing.