hmm... let me see if i can answer this, not being very well versed in the mechanics of the thing. there is a separate small motor and drivetrain/freewheel that is attached to the hub of the rear wheel opposite the rear cassette. power through the motor is controlled with a thumb throttle up top, and that moves the secondary drivetrain (which is a short little chain on a tiny one gear freewheel). power is transferred thru the hub to accelerate the rear wheel. or so it appears. haven't not taken the thing apart (the motor is safely sealed away and the drivetrain is not fully exposed) i have to admit i'm not entirely certain just how it works.
-jb
edit to original post - i just found a link on ebicycles.com that show the motor set-up and explains a little more about how the rear chain drive works:
http://www.ebicycles.com/ebicycles/chtuspd.htm
they also have other electric bikes on the site with other types of drive (hub and friction motors), for those interested in what's currently out there.