The trick is how the top screen is made.. it's like looking at a ruffles potato chip, there are many small hills and valleys angled at a precise degree. This lets your eye's both get their own image, thus providing 3D effect.
Trust me, you really have to see this thing in person to understand why I'm incredibly impressed. Nintendo is using an LCD technology that sends each eye an independent image that the brain merges together, and the effect adds depth. A lot of depth. The effect is immediately obvious, yet seems so natural. And there are multiple sweet spots, so you don't have to awkwardly hold the system in a position that doesn't feel comfortable. If you twist the system you'll get double images and lose the 3D, but it's simple to keep the stereoscopic effect within view.
You know Nintendo's a beast when Sony has a great conference and they poop on them with 2 games - NitemareNS GT: Ragtag 21
You know how when you do magic eyes you cross you eyes and the image appears 3d? It's like that but the way the light is projected into your eyes it crosses the channels to make it appear 3d. Thats the best I can describe it. Someone will have to fill in the technical blanks for me.
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Nobody knows how they do it without glasses, but this is the principle - imagine looking at an object on a table. Both of your eyes 'see' it from a different angle. If the screen can somehow project a different image to each eye, one from each angle, then it will appear in 3d.
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