Hey Aaron,
Thanks for the nice compliment! While filming the screencasts, I tend to use the iPad Simulator in conjunction with an app that (I'm pretty sure) was compiled internally from source code that's floating around out there.
Rather than send you on that particularly wild goose chase, a good alternative might be: PhoneFinger from Wonder Warp Software (
http://www.wonderwarp.com/phonefinger/)
Another option might be SimFinger from Atebits, which I found here:
http://www.swiss-miss.com/2010/08/simfingers.html
However, I suspect you're wanting some immediate feedback from the app that you're using whilst it's being projected. For this, I'm afraid that the particular app you're using must have some built-in code to present visual feedback when certain gestures are performed and the iPad is connected to an HDMI cable.
(AFIK) We've been thinking about adding that to our internal builds for screen recording purposes, and potentially as an option for the release versions of our apps, but I'm afraid that's something we'll both be looking forward to, for now.
I hope that at least solves the mystery of how we do that, even if it might not be the right solution for live demos. :^)