Comprised of a light, rubbery headband and a pocket-sized USB-connected external box, the NIA monitors the electrical activity in your brain and the muscles in your head and uses algorithms to translate this activity into commands: "If X area of the brain lights up, do Y. If this muscle contracts, do Z." That's the short version. The first time you use the NIA in a game, it's a struggle to make your first movement, but then you twitch forward, accidentally fire your weapon, and twitch backward again as you create a feedback loop between yourself and the NIA.
Eventually, you figure out how to move in all directions - it happens instinctively and, paradoxically, when you stop struggling to make it happen. (In Unreal Tournament 3, you still use the mouse to look, but use the NIA to move and fire weapons.) The more you use the system, the further it can tailor its algorithms to understand your intentions, and the more reliable it becomes.