I'm guessing he had emacs open in a "Cathode":http://www.secretgeometry.com/apps/cathode/ session. The extra warping at the end of the video can be achieved by fiddling with the "distress" parameters in Cathode's preferences.
Is there a linux alternative to that? I want it incredibly badly.
The apple2 screensaver that comes with xscreensaver can be used as a terminal emulator. You can also get a chintzy version by fullscreening xterm or gnome-terminal with the vt220 TrueType font and green-on-black, but that doesn't give you CRT distortions, or for that matter even correct-looking reverse video.