It hooks up to the Wiimote nunchuk style. Stick your finger in and it'll detect your pulse right away,wth the aim of checking stress levels and the like. What this actually means in reality is a different matter, Ninty was very vague about just what games you'd use it for.
Unfortunately, like Project Natal, it was billed as a bit of future gazing, so you won't be able to indulge in leftfield surgery games for some time. Bummer.
For more on E3, keep an eye on our games blog.