It uses ping-pong balls as diffusers on a laser-cut base. I had heard good things about the itead colorduino so wanted to try it out. It is significantly brighter than the rainbowduino, and has hardware PWM, freeing up the AtMega 328 for other stuff. I generally prefer it to the rainbowduino, but for anything larger I would go with the rainbowduino as it is much more widely used. There is also much more software written for the rainbowduino, although it could easily be ported.
The 8×8 LED matrix was just the start for George. Check out the much larger display matrix he is working on: