How do they work? Well SpokePOV explains on their site, "A SpokePOV is a 'stick' of LEDs with a magnetic (hall effect) sensor on the outer end. When a magnet passes by, the microcontroller takes note. By counting how long it takes between magnet passes, SpokePOV can tell how fast its rotating and quickly blink the LEDS to present an image. Therefore, no matter how fast you are riding, the image will show up correctly."
While MonkeyLectric takes a different approach, "We only manufacture environmentally safe products (lead free and RoHS compliant). We recognize that disposable batteries are a significant environmental side effect for small electronics, so we design all our products to have equal or better performance using common rechargeable batteries. We try to reduce materials use in our manufacturing, products and packaging wherever possible. We also hope our products will inspire more people to ride bike."
Either way you slice it... these are amazingly cool.