I totally believe that is real!
I am from Brazil and I have seen babies and little children dance that kind of dance a lot. Tha dance, that is called in America samba, is popular in Brazil as AXE (a variation of samba)... it is not a very clean type of song (a bit of sexual/durty), in special for children, but it is very popular and we see it on tv all the time. But... I agree when you said this baby is a heck of baby, so young and with so much coordination.
look at this 3 years old: http://www.youtube.com/watch?v=3oAxJFPciqs&feature=related
Definitely real. My mom told me she saw this on the spanish channel news and she was cracking up. I did a search and found it on You Tube. This little kid is a real riot and I wouldn't be surprised to see him in a few years on some show on tv. He's definitely got the makings of a dancer. 

Totally real!!! And he's an amazing dancer!
fake
its REAL
He is not dancing Samba, he's dancing Kuduru, a style born in Luanda, Angola. Allthough the vid was made in Brazil, yet the lyrics say: "this is not samba. This is kuduru!"
!
Of course it's real. In Brazil babies have rithm flowing on their blood 

DIS IS REAL