The tool being used for Decapod's prototype design is called Balsamiq Mockups and it is a flexible tool that allows you to quickly draw up designs and interactions without worrying about a polished look and feel. While the sketchy look and feel of Balsamiq Mockups may be unusual at first, it helps put the focus on broader designs decisions and interactions.
In Decapod user testing, Balsamiq Mockup's window is stretched across two monitors connected to a single computer. The monitors are set up in "extended" desktop mode so that each monitor displays left and right of a larger desktop.
One monitor faces the subject while the other faces the test administrator and not visible by the subject. On the subject's monitor, the interface being tested is shown (as per the User Test Protocol being administered).
On the administrator's display (which is not visible to the user), is the rest of the Balsamiq window which contains "off-screen" assets to be used during testing. As the test protocol proceeds, the administrator would drag objects from their display onto the user's screen mimicking functionality and results of user activity.
The setup for remote testing is nearly identical to the Local test configuration:
The difference is that the user's monitor will be shared using Internet screen sharing software like Skype, Apple iChat, or Adobe Connect.
The test is then administered by having the remote user talk through their interactions, and the administrator would move "off screen" assets on and off the unshared monitor and onto the shared display.
In addition to the screen sharing software, voice or video chat is also needed. Skype, iChat, Adobe Connect, and a plain old telephone are options.
Balsamiq is cross platform and single user licenses can be used on multiple machines. They even give away licenses to "do gooders".
Jonathan, designer on the Decapod Project, is using a single user license donated by Balsamiq Studios.