It's actually two pieces of technology (or so the rumors have it)...
Originally Posted by DisneyDude2006
1. voice alteration technology that basically superimposes Crush's voice
waves over what's being said by a CM.... A very nice use of digital signal processing
2. CGI puppetry. The CM has some device (think fancy Wii controller) that
control Crush's movements and gestures.
Probably has a joystick than can control position as well.
BTW. there's Stich in Innoventions that was the prototype for this.