Skin is quite tricky to depict mainly because it's translucent light passes through it and refracts back out making straight pink polygons not completely convincing no mater how many you use.
In rendering/raytracing/nonbias software a technique called sunsuirface scattering has been developled to simulate the effect of light hitting the skin (or other materials that are translucent) it's typically been quite computationally expensive.
So these guys have developed a way to achieve the look of real skin in realtime on current hardware using a realtime ssss algrothim (separable subsurface scattering) combined with some highly detailed skin maps HDR bloom and all the tricks.
It's an interesting look into the future of what will be possible for now it's very much a tech demo most hardware won't run it and all it does it rotate a bald guys head in different lights the overhead of a full game would mean I doubt we'll be seeing this sort of tech in practical use for a while. Still it does look really quite realistic and to achieve that look in realtime is quite astounding.