This project is certainly very real and working.
All Pleos are equipped with a small 7-pin connector next to the power-switch. It is hidden under a small bit of plastic glued on to keep us from doing silly things. This port contains a 3.3V power-source and ordinary RS232 (at 3.3V level).
RS232, for those who might not now, is the same kind of serial data-communication used to connect ordinary dial-up telephone-modems to computers, at least before USB got popular. PCs usually have it at -12/+12V levels though, and in rather large 9-pin D-SUB connectors. Well, actually ... they usually don't really have it all that much anymore, since it is of limited use today. For ordinary users anyway. :-)
The actual communication that can take place using this Pleo RS232-port is the exact same that you have through the USB. Not at all as convenient as just connecting up a USB-cable, but a cable could be made to connect the computer (using a voltage-level shifter) this way. The end result is the same, since a driver on the computer converts the USB-connection to an ordinary COM(serial)-port.
For hardware-hackers though, the plain RS232-port on the Pleo is great. This means we can, with relatively little fuzz, connect more or less anything we like.
In this case, XBee radio modules are used to extend the serial link wirelessly.
XBees are intelligent radio-modules that uses the ZigBee-protocol (IEEE 802.15.4). They are small, relatively cheap and quite configurable for many different purposes. They can be networked, with several modules talking to each other at the same time, or used as single point to point serial link. They also run on 3.3V, and can therefore be powered straight from the Pleo-port.
On the non-Pleo side of things, in this video we find the Altoids-can. Inside it is another XBee. The two XBees are configured to talk to each other and simply replaces the cable that could have been used, instead creating a nice wireless radio connection.
The XBee in the altoids-can is accompanied by a microprocessor board, in this case an Arduino. Arduino is a very nice fully Open Source controller board built using the Atmel AVR ATMega CPU-series. It's incredibly easy to use, quite cheap and has a lot of helpful users spread out across the internet.
The Arduino then communicates with the Wii-Nunchuck using a protocol called I2C.
A program running on the Arduino simply reads the position of the accelerometer inside the Nunchuck and transmits appropriate commands tho the Pleo over the wireless connection. As said, it's exactly the same commands that you would be able to send using Dino-mite over the USB-connection. No actual hacking inside the Pleo software is necessary, and the only modification that needs to be done is removing the small glued down piece of plastic covering the connector.
Using the serial-port on the Pleo, other things are also possible, like connecting a small Bluetooth-RS232 module to it instead of the XBee, and then use any computer with bluetooth to talk to the Pleo, for example using Dino-mite, wirelessly.
Lastly, in order to keep the Pleo from getting bored with the whole ordeal and move away by itself, a very simple skit that does nothing at all is placed on the SD-card.
End result: Wirelessly remote controlled Pleo. Sort of like a RoboSapien, but green. :-P