As I understand it, they build a parts conversion, using combinations of US made and original HK parts. Only in the last few months did they work out a method to stamp their own receivers. There's really not a heck of a lot to it.
Keep in mind, I actually haven't fired one, but I've been VERY keen on picking one up and doing a lot of research....
You'll find that Todd, the guy who runs the outfit, get's usually an extremely bad rep from a lot of people. I'm not going to say whether or not it is warranted, but as I recall he's been banned from a number of message boards. I've heard of problems with customer service, people getting screwed out of cash, etc. But I've also heard of broken parts replaced within days.
As for quality, the original runs (late 99's I think) were piss poor. Poor quality finish, poor workmanship, lots of FTF and feeding issues. However, a lot of the newer SW5's seem to only have the initial under 5 hiccups, then go on to be quite sweet. Heard of a few probs with the PAD, as well.
Bottom line is this.....it's a 12-1500 dollar copy of an HK94. It is not an HK, and I wouldn't expect it to be. Then again, your average HK94 goes for about 3-4000. Quality and finish will not be up to HK spec, nor do I think will performance (not saying it'll suck, though). BUT, if all you really want is a plinker and don't want to spend the money for a real HK94, or you're not planning on an MP5 conversion, it wouldn't hurt to look into it. DEFINITELY make sure you pick one up new....and if possible I'd find a place to test fire one.
Apparently they've also got their SL8 mag conversion off the ground. Looks quite nice.....initial reports say they're pretty good. Like any venture, SW is new, so some issues are almost to be expected, and they seem to be making some effort to rectify others.