Things like this are just totally cool. Grant Skinner has figured out a way to allow his Nexus One to be used as a controller for these little race cars. By tilting the phone, the accelerometer in the phone is used to make the car accelerate at a predetermined speed. If you tilt it just a little, the car will go slow. Likewise, if you tilt it all the way down, the car will go faster.
To summarize: The generic mobile client connects over the LAN to the desktop app. The desktop app sends it a "surface" SWF which contains all of the graphics and logic for the interaction (allowing the host to dictate the experience). The mobile client then sends accelerometer data to the host, which interprets the data, and sends back commands to update the client UI. The host communicates with a Phidgets motor controller, which controls the speed of the cars. And yes, it supports multiple connections (limited to 2 in this case because that's how many cars I have).
The make-shift harness allows you to really get the gas pedal feel. Its just a few rubber bands screwed down on a piece of wood that allows you to slide your Nexus one in and press it like you would a real gas pedal. The green lights are used to gauge the level of speed the car will travel. Mr. Skinner has a few more of these projects in the making, so there should be a few more innovative experiments posted shortly.