It all works using a differential gear.
If the two wheels turn in the same direction, and at the same speed, the differential doesn't move, and the point stays facing the same way. However, if the wheels move at different speeds, then the gear unit moves at a rate which is equal to the difference in speeds of the two wheels - this is then translated into a rotation for the pointer.
Note that the wheel rotation is negated through the additional of a single gear; a standard differential will rotate only when both wheels are going at the same speed, which is the opposite to this application.
In this model, there is a slight discrepancy with the position pointer because the gears controlling the pointer are not the same size :( But it's fairly close, and demonstrates the technique.