Its remote, fast, and automatic. It scans every single app in the marketplace and every app uploaded as it is uploaded. It wont effect upload time of legit apps. Its wont automatically remove apps that are flagged, but instead sends them off to actual, live human beings to check them out.
Its called "Bouncer". If it works, its the end of any malware issues in the android Marketplace, and probably the best possible compromise for a free market.