From the Author:
The effect is based on video feedback implemented with WebGL and its shading language, which means most of the work is done on your GPU. The videos are in WebM format which works on Chrome and Firefox.
The feedback is connected to the mouse, so its interactive, but if you dont move it for a while, it starts changing automatically.
You can colorize the video by taking the palette from any image. Just check "colorize" in the controls to turn it on then paste the URL of a jpg or png in to select a palette.
Basically it combines luma key with a feedback layer transformed with scale-rotate-translate and mirror tiling. Thanks to Josh Goldberg for showing me this trick. Named after Nam June Paik who introduced videofeedback to the art world.
You can get the source from Google Code.