Just like any camera, the Lytro has an optical lens that focuses to any distance. It has a relatively large aperture of f/2.0, which allows for a relatively shallow depth of field.

The only bit of hardware that's special or unique about a light-field camera is its 'micro-lens' array. The array is a repeated pattern of 3x3 matrices. Each of these 9 different microlenses focuses the light slightly closer or slightly farther away than the others. When you take a picture, the camera records data on the sensor that is then processed into exactly 9 pictures, each corresponding to a slightly different focal length (and therefore a slightly different band of the photo that’s in focus).

The software then uses contrast detection to make a 20x20 sub-matrix indicating which of the nine images is in focus at the chosen point in the image. When you click on a point on a ‘living image’, it looks up that point and loads the image for which that point is most in focus.

The Lytro contains an 11 megapixel sensor. But because it takes 9 photos at once, the effective resolution of the final photograph is 1080x1080 pixels.

It’s not a very complicated design: A microlens array that adjusts the focus on a small scale to produce 9 different images, each with a slightly different range of focus.

Thinking about ‘rays’ of light isn’t necessary to understand how it works.

Here’s a video of the founder getting tripped up when a reporter pinpoints how his technology works (1:05)

http://video.forbes.com/fvn/sxsw-2012/eric-cheng-lytro-lightfield-camera