The caseless ammunition in its early appearance was designed as a block of the propellant, coated with flammable laquer, with bullet and primer "glued on" the propellant. Final ammunition design DM11, that appeared in the mid-1980s, featured "telescopic" design, when bullet was fully enclosed in the block of the propellant. The cartridge propelled the bullet that weights 3.25 gramms, to the 930-960 meters per second.
Early prototypes were prone to the ammunition cook-offs during the sustained fire, but later Dynamit Nobel solved this issue.
In the late 1980s the Bundeswehr (West German Army) began the field tests of the pre-production G11s. After the initial tests, some improvements were devised, such as removable optical sight, mounting of two spare magazines on the rifle, and bayonet/bipod mount under the muzzle.
The modified variant, called G11K2, was tested in 1989, scoring at least 50% better combat accuracy when compared to G3 rifle. Initial batch of some 1000 G11K2s was received by Bundeswehr in 1990 or so, but due to some reasons the whole programme was cancelled by German Government. Main reasons of this cancellation were, in my opinion, the lack of fundings after the re-union of the West and East Germanies, and the general NATO policy for unification of the ammunition and even magazines for the assault rifles.
The slightly modified G11 was also tested in the USA under the ACR (Advanced Cobat Rifle) programme, in 1990. The ACR programme was not intended to result in adoption of the new rifle for the US Army, just to test new technologies and designs, and the G11 proved itself as a very accurate, comfortable to handle and fire, and reliable weapon.
13th prototype of the G11 (HKpro.com)
caseless ammunition - early variant at the left, latest variant DM11 (cutout view) - at the right
schematic drawing of the G11 bolt & feeding system
http://world.guns.ru/assault/as42-e.htm