It's an induction change approach, I believe.
I actually had (come to think of it still do, it's in storage somewhere) a laptop from the early '90's ('92~'93) that had a built in mini-trackball ... it didn't work all that well. The rollers (pre-optical, so it had rollers like an old mouse) gunked up pretty quickly, and it was a bit hard to control finely due to its small size, not to mention collecting bits and fragments of mystery substances. I don't know if adding optical technology would improve matters or not.
