Apparently, it's an application of this: http://en.wikipedia.org/wiki/Kalman_filter
I know the balancer I worked on (https://collab.cc.gatech.edu/humanoids/node/1241) certainly does, although from that project I can also tell you that most Kalman filter implementations are probably incorrect. It's fairly easy to implement a filter which behaves quite well but does not actually behave like a Kalman filter.