The demo is quite impressive, and he uses some extremely clever tricks to fit it all on a microcontroller with 32kB of EEPROM and no hardware multiply or divide. Linus released the full source code after an exciting reverse engineering contest uncovered many of his techniques. They include decompressing code from EEPROM at runtime, a novel video bus which uses extra I/O pins as fast inter-processor communication, and a nice looking dithering scheme.
Turbulence earned a well-deserved first place in the console/wild category at Breakpoint 2009. Congrats to Linus for showing us what this chip is capable of!