The technology is powered in part by C3 Technologies, who explain their software as follows:
The technology is based on high-resolution aerial photography with carefully calibrated cameras. For every picture, the camera’s position and angle are calculated with extremely high precision, using a very advanced navigation system. This is what enables us to give each pixel its geographical position with decimetre accuracy. Then, using stereovision technology, we combine two sequential pictures to measure the area’s height profile.
The result is an aerial photograph with each pixel positioned in three dimensions. Over an entire city, thousands of such photos are combined into one coherent 3D model – through an automated process in our unique 3D-processor.
Thanks to all this, there is no one today who can take pictures with the same precision and speed as we can. One example is when we filmed all of Stockholm in October 2007 and created a realistic, yet zoomable and turnable, 3D model of the city in just 3 days.
It seems to be a pretty cool technology, considering cities can be created so quickly and it works on such a wide variety of platforms. The detail is far worse than what Google Earth and Virtual Earth have, though it renders trees and “any object larger than a VW bus”.
Ogle Earth has a post that gets into a bit more detail and is well worth reading.