people have been trying to work that one out since I posted it.
realistically though, its either witchcraft or I am using one of the cameras

at about 11 seconds in, you see the reflection of the orientation lights that are needed, I plan for home use to have a small LED lamp attached to side of my monitor, and for larger tests it can simply be a larger version hung above.

it actually knows about scale and rotation too and can be combined with http://www.youtube.com/watch?v=6Z51-vCa0_Q to allow even more nice things to occur.

I keep mixing up my n900 with my desktop mouse