If you take the spin from the Chief Executive and NPC members at face value, then Hong Kong has been granted greater democracy. On the other hand, thinking people would understand the devil is in the details of the implementation.

First, the NPC has ruled out any change to the balance of directly elected members of LegCo vs. Functional Constituent members of LegCo for 2012. This is the third time that the Central People's Government has ruled against changes in the balance in LegCo. The first time handcuffed the last British Governor Chris Patten and the second led to the Donald Tsang debacle of 2005. The rumours have been out that Donald Tsang wants to reintroduce the 2005 proposal, which actually increased the number of Functional Constituencies in LegCo, which was a step backwards towards the eventual elimination of the Functional Constituencies. That is, IF the NPC and Donald Tsang are actually committed to the elimination of the Functional Constituencies. During the latest round of Public Consultations, many argued to redefine "universal suffrage" for the LegCo to mean that the selection of half of the LegCo candidates would still be by the functional constituencies to be rubber stamped by the electorate and the full text of the NPC Standing Committee's decision does not make it clear that the Functional Constituencies are to be eliminated.

that the election of the fifth Chief Executive of the Hong Kong Special Administrative Region in the year 2017 may be implemented by the method of universal suffrage; that after the Chief Executive is selected by universal suffrage, the election of the Legislative Council of the Hong Kong Special Administrative Region may be implemented by the method of electing all the members by universal suffrage.

If the NPC Standing Committee was fully committed to the gradual progress towards universal suffrage as normally understood, they would have allowed some gradual reduction in the number of Functional Constituencies in 2008 and 2012.

The election of the fifth term Legislative Council of the Hong Kong Special Administrative Region in the year 2012 shall not be implemented by the method of electing all the members by universal suffrage. The half-and-half ratio between members returned by functional constituencies and members returned by geographical constituencies through direct elections shall remain unchanged. The procedures for voting on bills and motions in the Legislative Council shall remain unchanged.

But hardly anyone actually expects the NPC to live up to their promises without major "redefinitions" and "reinterpretations" in order to maintain their control on the passage and implementation of legislation in Hong Kong. The NPC's "high degree of autonomy" is as laughable as the Heritage Foundation's rating of Hong Kong as the Free-est economy in the world.

Which brings us to the next "redefinition" by the pro-CCP forces, especially touted by Regina Ip Lau Suk-yee during her LegCo by-election campaign, on the nature of "a broadly representative nominating committee" for the candidates of the Chief Executive.

The Session is of the view that in accordance with the provisions of Article 45 of the Hong Kong Basic Law, in selecting the Chief Executive of the Hong Kong Special Administrative Region by the method of universal suffrage, a broadly representative nominating committee shall be formed. The nominating committee maybe formed with reference to the current provisions regarding the Election Committee in Annex I to the Hong Kong Basic Law. The nominating committee shall in accordance with democratic procedures nominate a certain number of candidates for the office of the Chief Executive, who is to be elected through universal suffrage by all registered electors of the Hong Kong Special Administrative Region, and to be appointed by the Central People's Government.

Now as previously pointed out here, the current nominating committee is not broadly representative. For those newer here, I HIGHLY recommend reading through Carine Lai's three part series on the election of the current 800 members of the nominating committee and the breakdown in the nominations in the last CE non-election.
Part 1
Part 2
Part 3

The proposals by Regina Ip and echoed by most of the pro-CCP crowd would maintain the existing nominating committee but force a candidate to not only obtain 100 nominations as per the current rules (which is nigh on impossible given the current structure) but also force a candidate to have a threshold of support from each of the 4 sectors within the nominating committee. This would turn the universal suffrage for the CE in 2017 in to an Orwellian rubber stamp exercise of the sort preferred by authoritarian thugs like Saddam Hussein. Vote for anybody as long as you vote for our candidate.

So for the Associated Press headline writer to suggest that Hong Kong has been granted greater democracy is premature at best and cynically, the rumours that Donald Tsang is going to dust off his 2005 Constitutional Reform proposal suggest that greater democracy is only the spin provided by the HK SAR government with no intentions of true democracy being allowed in the long run.

UPDATE: 12:37am HKT : What did I say about eliminating the Functional Constituencies? The CCP is so transparent in their authoritarianism.

He {Chairman of the Democratic Party, Albert Ho} said during a forum with Legislators at Government House, a deputy Secretary of the National People's Congress, Qiao Xiaoyang, had explained that functional constituency seats cannot be scrapped, due to opposition from the DAB and Liberal parties. If this is true, Mr Ho said, then the parties owe an explanation to the Hong Kong people as to why they're holding back democratic development.

As for needing secret instructions from Beijing, the Tycoon Party (aka Liberals) needs no instructions on monopolising power as they do it every day in the HK economy. As for the DAB, they've become everything they despised about the British colonial government, including pushing for instruction in a foreign language with their decision to move towards Putonghua for teaching Chinese. Power corrupts and the DAB are either sell outs to their populist ideals or their populist ideals were merely a United Front tactic to sell the HK people in to accepting the rule of their puppet masters from Beijing.