One word (err...  acronym):  WPF.

It's all written in WPF (the options dialogs, the buttons for paging through embedded documents, etc.)--  they're even rendering the powerpoint slides in WPF (you can tell because of the distinct blur effect you get when you pan around a zoomed slide--  it's the same as what happens when you do a translation in WPF).  That's how they're able to get such smooth scaling up to such a high resolution.

If they've got a PPT renderer in WPF, I wonder if that means the next version of Powerpoint might use WPF.  It's definitely suited for it, with all the animation capabilities built-in.

Quite cool to see that there are Microsoft teams actually fully embracing it!

[edit] On further inspection (with Reflector), I think they may be rendering to XPS (using Office's built-in XPS converter) and displaying that.  Whatever they're doing, it's pretty cool, though.