Governor Schweitzer of Montana points out that the REAL ID system is still going to based on the very subvertible procedure of obtaining a state id with a birth certificate. Though the DHS regulations require verification with state Vital Records offices before issuance there are exemptions that are allowed to bypass verification to allow for citizens with missing or non-verifiable documents.
A summary of the impacts from the RI DMV is available and is probably a representation of what all states are faced with if they decide to comply. A run down of major points is also available from the ACLU.
Several states have already passed laws rejecting the implementation of state ID systems to comply with the federal REAL ID law (Maine was the first, Montana is another). These states license and ID holders will not be allowed to board an airliner that is regulated by the federal government, even though there is no such animal as a REAL ID certified state ID yet for any of the states. Most states have applied for and received extensions on their implementation to 2011.
From The Economist:
Under the law, drivers’ licenses, which individual states issue,
must also contain certain identifying information and employ common
technological protocols. If states refuse to comply—as Montana’s
legislature has already done—then federal officials, such as airport
security staff, will not accept the non-compliant IDs after 2011.
As to the costs, according to an article on stateline.org, "Congress has appropriated $90 million to help states electronically verify the identity of an estimated 245 million drivers and reissue
secure licenses." A far cry from the estimated $11Billion in costs to states estimated by DHS.
For more from Governor Schweitzer, and DHS response to his statements, NPR has a 4 minute audio program available.