To get beyond the somewhat distorted press accounts regarding the Spoor et al letter in Nature on "Implications of new early Homo fossils from Ileret, east of Lake Turkana, Kenya" you should read this post at John Hawk's anthropology web log.
As with much press coverage of scientific issues something that has been known about for many decades: that multiple species of Homo coexisted at the same time, and that the evolutionary tree of genus Homo is quite bushy and complicated, and not a simple linear ladder of "progress"; is being presented as a new discovery, and furthermore the actual issues discussed in the Spoor letter aren't covered in the press coverage.
The image is a to-scale superposition of the skulls of the young adult (or late subadult) Homo Erectus (KNM-ER 42700, one of the subjects of the Spoor et al letter, cranial volume about 700 ml) on top of the skull of the largest known Homo Erectus skull (OH 9). A cool image that illustrates the diversity within Homo Erectus.
Just FYI, 90% of modern humans have cranial volumes in the range 1040 to 1595 ml [talk.origins FAQ], with volumes less than 1000 ml being extremely uncommon.