What's just as impressive is the full size view of the image. The background brings the ambient colour of the photo to make it more immersive. Very nice!
I might be wrong here but I think the background is just the picture, although scaled and has got many filters on it.
What they got right this time is adding the shadow around the image making it easy to distinguish from the background, and blurring it so heavily that none of the detail is distracting.
Very nicely done.
In the past month or two, though, it's gotten damn responsive (for me at least). Give it another shot if you haven't used it recently.