It's got a built-in battery charger and can also run from a wall wart without using batteries at all. The reason the external power supply has to be AC is that it needs dual negative and positive power supply rails, which it gets from rectifying the AC and using that to charge a pair of batteries. Cheap, easy, and in theory gives decent audio performance.
If you read NwAvGuy's blog, the modifications necessary to run it off DC are pretty much exactly what he wouldn't want people to do.
