In the latest version of WordPress, it gives you the opportunity to view a preview of what your site would look like using a different theme. You basically just click on the theme, it takes over the screen and you have a chance to activate or close it (and return to the previous screen, which is grayed out in the background). I have seen a similar technique used on a number of websites recently for display images as well.
I’m wondering what technology/code they use to do this?
It’s open source – use the source, Luke.
Look in wp-admin/js/theme-preview.js