The code for the hack isn't posted yet but here is a brief rundown on what was changed.
I modified the Synaptics touchscreen driver to have it create a character device at /dev/tsout that it dumps the touchscreen events to. I made /dev/tsout readable by the java layer, and then modified a fingerpaint example program that Google has posted to draw the circles. I have a thread in there that constantly polls that file, and when it sees data there it fires off an update event to the UI thread which scales the x and y position from the coordinate space of the touchscreen driver into the coordinate space of the android canvas and then draws a small circle there. I have it using a different color for the two fingers to make it easier to see.
Ryan, the publisher of the RyeBrye Blog has said he'll post the code used at a latter date, so keep an eye out for updates.