It's LCD projection (as opposed to LCD direct view, which is what the earlier remarks were about). LCD projection is the same way many of the small portable video projectors work, except in this case they do it internally and use lens(es) to bend it around to make the case small. I don't know exactly how they do it inside the case, but it's one of their newest models.

Side note: Most if not all of the large Sony TVs (anything 32" or 35" or so) sold in North America are made at Sony Technology Center-Pittsburgh. Even the glass for the CRTs (starting from sand) is made there.