How it works (technical stuff)
The plugin is a combination of WordPress extending, the YouTube API and jQuery. When the plugin is activated it will add a post type in the WordPress installation called ‘annotated_video’, which is not visible in the administration menu. If a shortcode is used in a page, the plugin adds a ‘annotated_video’-post to the database using wp_insert_post(), with the YouTube code as title.
If a user is logged in, an input field is visible to add annotations to the video. The plugin uses WordPress’ standard commenting functionality to add a comment to the annotated video. Expect that it checks the current time of the YouTube player and saves this timestamp together with the comment. Also, it uses the jQuery Form Plugin to submit the form without a page refresh.
When the comment is saved, the comment is added to the DOM using jQuery (so no additional request to the server). From there on, jQuery sorts out which comments should be shown at what time using the timestamp classes added to the element.