AAL technologies for rehabilitation constitute a major research area within AAL research. A large number of novel technologies and applications has been developed in R&D projects. Our focus in this paper is to see how these technologies support innovation in the field. We document how these technologies and innovations meet the requirements driven by our sample project, called COPD@Home, carried out in the Norwegian settings. We outline the participatory design methodology used in COPD@Home. We document the resulting requirements. We then analyze the definition of AAL provided by some European strategy documents, and briefly survey a number of EU-funded projects in the field. We provide a gap analysis between the requirements from COPD@Home and the results from the surveyed EU-funded R&D projects. Our findings show that existing R&D lacks proper treatment of organizational issues related to AAL technologies such as re-engineering of existing work practices, training and on-the-job learning of care personnel, and support for collaborative workflows. In general we also see a lack of focus on service innovation as an inherent part of the current technological developments in AAL.