Interesting. Will have to look past the 'it's magic' marketing-speak to find out how this really works.
First thought is simply an automated composite of multiple exposures with varrying focus. Pretty cool 'select the focus target' demo on the Lytro site:
http://www.lytro.com/picture_gallery. Playing with those, there seems to be about 3 or 4 distinct focus depths, not infinite. Noticed that distant objects in a few of the photos cannot be brought into focus.