Fast forward to 2:36 on the video, where Claire (or Clare) plays with the water. The reflection of Clare on screen shows her arms in roughly the correct positions in respect to real Clare. The water seems to be moving based in her hand movements.

However, keep watching to the point (2:37) where she appears to make a rippled appear on the left-hand side of the screen. Real Clare's arms are almost crossed in front of her. 'Reflected' Clare's arms are spread out. Even more startling is the fact that (see the screenshot) the ripple begins before Clare begins her gesture.

Says Peter Molyneux at this point, "There Clare is, in Milo's world. She's in that pond. Every hand movement is being recognised." Well, from the look of the footage is seems that either every hand movement is being pre-recognised, which is even more of an achievement.