I having problems to see weight effect area in the viewport.

For example this file:

http://bit.ly/1KYzGwK

used in this tutorial (Sorry, I had to use the code block to get around posting more than 2 links) :

https://www.youtube.com/watch?v=rkT92aoMpP0

Compare how its shown in the video (around 5:23) and this

In another test if I pose the object and try to weight paint on it:

So obviously the weights are being applied to the object, I just can't see it like its supposed to do. Any ideas?