The entire thing is done by using VRML interpolators. All you are really seeing are abstract shapes executing extremely simple rule-based movements. The demo is significant in that it shows how greatly one can tap into peoples' preconceived perceptions about personality to create an illusion of purpose and intelligence.
Click here to see the vrml source code
If you can run VRML, click here to see the VRML demo.
If you can't run VRML, click here to see a Quicktime movie of it.