It is actual Dye Sublimation, and the internet is full of information, take a look at the wiki page here, for more in-depth details.
So how does this affect me, or you for the matter. Simply put I can print out a graphic on special dye sublimation paper, wrap this paper around a mug in this instance and heat it up. The dye turns to gas, enters the porous surface it is held against and over a period of time the process completes. You remove the paper quench in cool water and the porous surface closes and hey presto you now have an image on a hard surface, like a coffee mug or something similar – I say this as more products will become available over the next few weeks or months.