Sharp is using a parallax barrier screen.

Check Wiki for details.

pretty sure this is right

In order to get 3D you have to get a different image to each eye. Just putting a lens in front of a screen would not be sufficient unless that lens somehow was tied to a viewers individual eyes.

I don't know the technical details, but the way I understand it that it is similar to privacy screens for computers where only the person directly in front of the screen can see and people peering at an angle will see black. Now narrow that perfect angle down so only one eye can see the image and add another filter for the other eye. The 3DS has a huge advantage over an entertainment system as it is easier to guess where the eyes are, and it only has to deal with one left and one right. In a home theater set up there would half to be a parallax pair for every viewer.

There was a tv in the THQ stand at E3 that worked the same as 3DS, I assume the same technology. The tv was somewhere between 30-40 inches and had no badge, and it did not work as great as you would expect. it would seem a larger screen affected the illusion somehow.

I have heard the term "parallax 3d technology" thrown around if you wish to look into it.

ok guys im just putting this on the table but don't think it might be right or wrong... magic???

They did it by thinking about 3D backwards. Most think of 3D as the screen popping out at you. Nintendo thought, it is damn near impossible to make screens pop out at you, therefore we should make the 3D go inside of the game.

Simple...Sharp the makers of DS and PSP screens already released the technology on their cellphonews in Japan since 2008. Sony & Sharp already agreed on a joint venture LCD manufacturing plant in Japan so there is a big chance of the next PlayStation Phone having 3-D screens too....

http://www.mobileburn.com/news.jsp?Id=9152

http://mydigitallife.co.za/index.php?option=com_content&view=article&id=1047842&Itemid=150

They used existing tech from other companies well and leveraged the obvious advantage of a handheld over a TV in the process.

Right now this tech doesn't work that well on TVs in terms of replicating a wide viewing angle allowing lot's of people to be sitting around a room a different angles and distances.

But on a handheld the view is one viewer at a fairly known distance.  Hence it's a marriage of device and tech that works pretty well in this case.

ONe thing I can say is that Nintendo knows where to spend their money effectively and knows what to research unlike other companies...

They used nintendo power. lol