It uses a special feature called MotionMatch™ to align the effect on your video seamlessly, and it work very well. You don't even need a gyroscope!
The app is free, and you get 3 effects. You can pay for more effects too.
It works best on dual/quad core devices, but it works OK on my single core device (Huawei ascend g300). I suspect it is an ArmV7 app, but I'm not 100% sure.