The locomotive in question is called the "Green Goat" by its manufacturer. It's a relatively simple design, with a small (by railroad standards) diesel engine and generator, a big bank of lead-acid batteries, and conventional DC traction motors. Lead-acid batteries were chosen because they are reliable, railroads already deal with them in large numbers, and in a locomotive added weight is seen as a good thing for tractive effort.

The switch-engine is a logical place to implement a hybrid because it seldom operates at peak power output. Large mainline engines are much less likely to make good hybrids because they are almost always running at full-power, and the size of battery bank that would be required for a useful hybrid would be truly huge. However, since mainline trains are carefully sized and engined accordingly, they are already pretty efficient. The newest generation of diesels (Tier-2) are much cleaner than the old, too.

Given that the largest single consumer of Diesel fuel in the US is the Union Pacific Railroad, every drop they can save is a big deal...