It works like this: Instead of rendering two unique 540p images to create a single "1080p" 3D image, it renders two distinct gameplay streams and uses specially keyed glasses (ours were marked "L" and "R") to isolate each player's display. The game on display was Ubisoft's Shaun White Skateboarding, which already supports stereoscopic 3D. A Vizio representative said they've been working with Ubisoft and Electronic Arts on supporting the feature and are licensing the technology to publishers at no cost in an attempt to drive adoption of their standard. Vizio's also hoping that other TV manufacturers using the same passive 3D technology will license the tech at, presumably, a less altruistic rate. Also not discussed: Sony's recently published patents, which certainly seems to cover this ground.
When watching the display glasses-free, it's clearly two overlaid gameplay displays; however, when donning one of the two pairs of glasses, each equipped with dual L or R lenses, the opposite display disappears. While the technology undoubtedly works, you will pay a pretty hefty price: instead of your brain stitching together two 540p signals into one 1080p "whole," the Versus technology sticks you with a 540p image and ... that's it. And it looks like it; the signal we saw when donning the glasses was notably less sharp than the 1080p, superimposed soup visible without glasses.
With cheap pairs of passive Player One and Player Two glasses planned for release, we can imagine this thing being a parent's dream come true. Have two kids always fighting over control of the television? Simple! Buy one of these sets, a pair of glasses, and they can both play at the same time. Of course, the secret truth is that this technology will live and die by its software support and, with a young technology with only one hardware partner at the moment, we can't imagine it will be very robust at first. But regardless of how many games support the tech, it makes for a great demo.