I just watched this video but had a hard time listening to the technical explanation. I couldn’t focus on anything except the guy’s hair. But this is what I found at their blog:
Based off of Johnny Chung Lee’s whiteboard, we assembled a four-foot rear-projected faux touchscreen. It’s perfect for our Wheel Of Mashup shows, which depend on an overloaded setup of Ableton Live. Because it’s overloaded, it’s very difficult to mouse quickly and accurately enough to mash things up on the fly. The touchscreen solves that.
They basically mashed a beamer, two Wii controllers, small and wearable infra-red lights and a PC with an overload of music clips to select and play music easily onstage. Very cool and artsy.