There are these things called TV Tuner cards for computers. They have Component in jacks. You can plug a console in and play it in a window on the monitor. I used to do this with an ATI All-In-Wonder.
I used to have some Ocarina of Time Gameplay that I video captured this way.
Anyway, that's very obviously what he's doing here.
Put the IR bar under the monitor, Plug the Wii into the Tuner Card, Play Wii windowed in Windows. No Emulator involved.
And he borrowed a second Wii. Because holding up one Wii proves you don't have another on the floor plugged into the computer. Really.