This was definitely very informative and a great watch but...
The Simple Answer: There is no one "perfect" position for everyone.
Never in these discussions do i hear much about ones forearm length, finger length, or overall body size. Aren't these factors all going to play into how one holds the instrument etc...?? I have a friend who is an excellent player, and he seems to adopt this approach with relative ease, however his forearm is probably 6 inches shorter than mine along with shorter fingers so when his arm "relaxes" naturally the break angle in his wrist relative to the strings is ALOT less than mine. I have a longer forearm, and much longer fingers than he, so if i was to employ this technique exactly as described my the angle of my wrist is just ridiculous.
I don't agree with everyone saying that a bent/relaxed wrist is inherently bad, but an over bent wrist definitely has it's problems, bend you wrist fully and you can see that making a fist or doing some of the motions she describes is not only impossible but becomes very painfull very quickly.
Also, if i compensate for the legnth of my forearm by pulling my elbow back then i am resting directly on the lower tendons which caused me some minor problems for awhile until i remedied the situation.
The simple fact of the matter is that the "straight-wrist" approach doesn't introduce enough tension into the equation to be detrimental (someone quoted bream, segovia et all as an example of the bent wrist approach, well, look at Russell, Barreuco, Bolshoy, countless others for an example of the straight approach). It depends on your anatomy as to which approach would work best for you, and this is where a knowledgeable teacher is invaluable.
I think the main problem with either approach (and she illustrates this) is the fact that most of us don't have enough finger independance no matter which position we use, ESPECIALLY the thumb, and combinations of thumb and other fingers. This is almost always what causes unnescessary motion in the hand, leading to tension and possibly injury.
I believe that if one concentrates totally on developing independant motion between the thumb and other fingers first and foremost, either position will work equally as well if it is properly chosen based on ones physical charateristics.