Joystiq cites Sony's David Coombes who explained that the Cell CPU does all the calculations necessary to handle image processing. Coombes says the raw data can be processed quickly enough by the PS3, taking "under a frame" to translate a game to experience. Memory demands are estimated to be between 1 and 2 MB of system memory.
While it's interesting to know just how much memory the motion-sensing peripheral uses, it would be really nice to know just how much processing power it requires. Microsoft's Project Natal uses between 10 and 15 percent of the Xbox 360's CPU power.
We've contacted Sony and inquired about this; we'll update when we hear back.