The 3D models look awesome to me. Not quite as good as something professional, but still very close. The site itself looks very amateurish and nothing like I'd expect from LFL. The trailer isn't playing from the link, but you can get it by directly ftping into the site and downloading it.

The reason most, if not all, fan films aren't shutdown is that unless they try to charge money for the end product, which most don't, LFL doesn't bother going after them. It's really only when you start trying to charge people to see your movie that you run into trouble.