It essentially uses the fact that the GBA processor is a less powerful version of our own, sharing near identical opcodes/registers/etc and only having, really, some different memory allocations (e.g. position of the GBA bios) and the GBA's scaling/translating hardware. So the idea is, if he can use the GP32's MMU to re-map all GBA bios calls to what ammounts to a translation layer for GP32 and memory likewise, there should be a possibility of making a GP32 effectively think it is a GBA. Which means it's basically only using 16-32MHz of processing power for the CPU. Then you use some of the rest of it to emulate sprite processing hardware and sound, and voila - full speed or better GBA emulation.
So far, he's got as far as a techdemo that works for mode 3 and mode 4 - no sprites yet, though. If you want to have a gander, though, fdave, the source is out on his site. IIRC he's a bit busy atm (though that's friend of a friend information - I heard it from someone, can't remember who, on these boards) so hasn't worked on it for a while, but its certainly not entirely vapourware.
If you haven't tried it, do try the tech-demo; it runs GBA mode3/mode4 demos at around 10x the speed of the real thing!
EDIT: Bear in mind, though, that the sprite hardware emulation and sound chip will probably put a huge extra load on the GP32 CPU.