Let's encrypt is the exact same trust model as conventional CAs selling you a DV certificate. Apart from that, the trust model in the public CA system does not and cannot vary by CA: you trust them all, equally, all the time.
Sorry, I meant the nature of the CA as a public benefits corporation that is more open than conventional CAs. Meaning maybe I personally trust them a bit more than Verisign -- although I haven't decided if I do, and really any CA will betray you rather than go to jail on your behalf.
Their certs are indeed the same DV type as always.
Makes sense to me, and I think this is the future of the web. HTTP will simply cease to be a viable option in the next 3-4 years if cert prices are reduced (or eliminated) and SNI becomes widely available.
Good for Let's Encrypt in taking the initiative to make this happen sooner rather than later.
It remains to be seen if it actually makes an impact upon launch. It certainly can't replace all the types of certs in use today.