it was considered a major innovation in the 1500s when they invented it. you ever hear the phrase "it's done with mirrors" when someone is pretending to understand how a magic trick is accomplished? Well, this is what they are talking about. It's done with mirrors.
http://en.wikipedia.org/wiki/Pepper's_ghost
That said it is sick as hell. I am always impressed by the things the that people could do centuries ago that we assume have to be some futuristic tech thing.
Oh, and not to be a jerk but you could have googled this for yourself very easily.