It appears to be buggy. It told me Internet.io, Business.mobi, Collect.fm and others were available (they're not). It was making me very excited until I learned it was mistaken quite regularly. :(
The current version of the service is based on the DNS lookup, which is not always accurate. The errors may happen when a domain does not have a name server record specified or it is in the a redemption period.
The current version is an experiment that checks if such a tool can be useful for people. All the received feedback will be used to improve it. Using more reliable approach of domain availability checking for sure has the highest priority.