More like nicking the video out on the N8, as the dock has a hdmi and usb side by side. So basically it is video out via hdmi, and keyboard and mouse in via usb.

That redfly is more like a VNC session, as it sets up a virtual screen and transfers the data over the usb cable (this is why a later model introduced a separate video in port as the virtual screen can not handle proper video). And i recall there is a program for windows that can do the same, putting the winmob "desktop" in a window.

Hell, Microsoft toyed with a similar idea around the turn of the century for hooking a winmob phone up to a tv to provide "computing" to the developing world.