CrackBerry forum member businesscat2000, claimed to be the mastermind behind this project and stated the following explanation:
"The CPU isn't emulated on Playbook (though it is on Windows). It works very similarly to how WINE works to run Windows applications on Linux. The app binary is mapped into memory and imports are resolved to point to my own implementation of the various APIs needed. iOS actually uses a few open APIs already, which Playbook supports just as well (GL ES, and OpenAL). The bulk of the work has been in implementing all of the objective C classes that are required. The ARM code of the applications run as-is - the armv6/v7 support on PB/iDevices are pretty much identical, and the code is designed to run in USR mode. No SWIs, GPIO accesses or any of that kind of shenanigans."
In this video you can see the iOS app SketchBook running quite fine on the PlayBook. In another video you can see the PlayBook running a mobile site app that only runs on iOS devices. (im not sure what the clicking sound is)