The technology works by capturing the model from several angles with cameras around the room. It then renders a featureless, grey model. The model is given the appropriate textures, before it's compressed and transmitted. Using another bit of kit called the HoloLens, people on the receiving end will be able to see and hear the hologram as if they are really there.
With this technology, people can have face-to-face conversations while miles apart. That conversation can then be recorded and played back. Partner Research Manager Shahram Izadi refers to this as a "living memory". This recording can even be shrunk dow and viewed on, say, a table. I'll let your brain make all the Star Wars references it can.
The tech we're shown in the video looks a bit bulky and is no doubt expensive, but it's early days yet. Maybe a few years down the line we'll all be having tea with our holographic aunts. Or pretending to be ghosts and haunting our holographic aunts.