They went into a bit of detail during the keynote. It's worth checking out a video if you can find one. It's towards the end, in the last 20 minutes.
Anyway, the gist is, a web application (say, Picasa, or Facebook) can register as a file handler for certain kinds of file types (say images) and then handle the upload from the client. A little contextual menu comes up when you plug in a sd card or whatever that asks you which (if any) file handler you'd like to deal with the files.