The video doesn't delve too deep into how the gun works, though the basic mechanics are fairly evident. The gun depends on an accelerometer (or similar device) to determine its orientation, which is seems to relay as a raw mouse/keyboard signal, hence the "no drivers" claim.
Say what you will about how tiring or cumbersome gameplay could be with one of these things—you can't deny that the upcoming version, which, if we're to trust "TheRedneckTechie," will use three pico projectors instead of a dinky monitor, sounds absolutely amazing. UPDATE: Ha ha, yes: there's another video (below). [Reddit via Crunchgear]