I think it's both. It uses voxels but they are abstracted away one layer and used to make a polygonal mesh. This allows for the smoothing you see in the video, while still getting most of the voxel benefits.
3d-coat uses this method for real time sculpting of voxel based objects.
This looks very cool. One thing someone mentioned on another forum, was the fear of getting that "Quixel look". it seems like there are enough options for customization, that it really wouldn't happen.
I also came across allegorithmic and 3d-coat. Any thoughts on those?