From the BBC:
Knee dynamo taps 'people power'
This is really clever. The designers use a computer and potentiometer to determine when the lower leg is just about at the limit of extension (before the foot comes down), then it engages the generator to halt the extension - something your hamstring normally does.
So they've in effect made a generator that doesn't demand any extra effort on the part of the walker.
The inventors liken it to regenerative braking in hybrid cars: rather than "wasting" hamstring muscle power by "braking" the extending lower leg at the end of each step, the computer engages the generator and captures energy, which slows the leg extension and does some of the work of the hamstring.
There's a good video as well:
http://www.bbc.co.uk/mediaselector/c...&bbram=1&asb=1