It uses Amazon's E-Commerce Web Service to find a wishlist by name or email address, and to retrieve the list of books on a wishlist. Then it uses Yahoo Pipes to search for news for each of the book titles and sort the results by date. Finally, it takes the results and replaces the book titles and authors with links to pages that will return results for an individual book or author. It also uses Freebase, a sort of structured Wikipedia, to retrieve a short description of on author pages where they exist. Every page also provides an RSS feed of the results that are returned.
For example, if you use my wishlist of mostly economics books (which also happens to be the default list used at the bookne.ws homepage), you might see an except and link to an article about Nassim Taleb's Fooled by Randomness, one of the books on my list.
The state is that great fiction by which everyone tries to live at the expense of everyone else. - Frederic Bastiat