Nick was referring to the exception, granted to pilots training in Hawaii, to the requirement that cross-country flights (defined as including stop at least 50 nm from the point of departure) be completed; the Hawaiian Islands are too small to allow a pilot to complete the cross-country requirements without overwater flight, and the FAA concluded (wisely) that making student pilots fly extended stretches over the ocean as part of basic flight training was... unwise. So, in Hawaii, the cross-country requirements are waived (although the detailed particulars, I leave to the more-motivated FAR-wonks).