I don't think this thing compresses as much as you think. In practice, it is extremely rare to achieve an 8 to 1 compression ratio let alone something higher than this.
First off, this is all rendered in real time. So all the objects that you see could easily be generated by functions in the program. Notice that the objects are all basic geometric objects as well - or objects that could easily be generated by mathematical functions. It takes less space to have a function y=x for a line or to draw triangles, than it is to store a bitmapped object. And if you notice the textures that are used are very blurry and are probably extremely small in file size and in actual resolution.
I don't doubt that there was some really great programming going on, but there's nothing miraculous either.
Notice that this is very processor/video card intensive - this helps to confirm my beliefs about the program. Rendering objects using functions, while taking up less space in terms of program size, ends up being very processor intensive.
-GL