Essentially, the technique involves recreating the scene in 3D space along with a smoothed out path that approximates the original path.  The scene is created from individual frames from the original video.

I’m sure as the Hyperlapse technique is refined, we will be seeing more interesting videos!

Most of us who have ever picked up a video camera have heard of the Steadicam. This minor miracle of technology has allowed camera operators to capture smooth and stable action shots without the use of cumbersome dollies or cranes. Garrett Brown, the inventor of the Steadicam, has recently developed the Merlin 2 for DSLR cameras and the Curve for the GoPro Hero. The built-in mount on the Curve will work with the GoPro HERO, HERO2 and HERO3 models. According to Tiffen, the GoPro LCD BacPac™ is required for use with the Curve, but it probably does not not make much sense to use a Steadicam without being able to properly monitor the shot. The Merlin 2 and the ultra light Curve (weighs in a 1/2 pound) may be just the thing to help us capture great hand-held action without the “shaky-cam” effect. Check out this video of Garrett Brown demonstrating the Merlin 2 and Curve at NAB.