I don't see how it could possibly work. From what little I can glean from the crappy info they have on their website, it looks at speed and incline, and then factors in tire/wind resistance as measured by some tests. Even the ibike people say it's only good for a single riding position because of the way the system is calibrated.

Many cyclists change their riding position constantly, and in any case wind and/or drafting conditions would have a dramatic impact on drag coefficients.