I wonder how they're doing this by just changing the DNS servers?
Do they return their own IPs and run a man-in-the-middle kind of thing?
UPDATE:
Just signed up. They do actually seem to redirect the traffic from domains like hulu.com/pandora.com/... to IPs that run a squid proxy. My guess would be that they just redirect the queries for the geo-localization to their squid servers and allow you to pass those that way
I wonder how they handle the flash video streaming, and stuff secured via HTTPS (e.g. BBC iPlayer for iPad/iPhone). HTTP is easy to transparently proxy due to the "Host:" header, but HTTPS and many other protocols don't have anything equivalent. I suppose they could just have a lot of IP addresses and assign one for every host they proxy.
In general, I'm surprised such services stick around at all. You'd think the MPAA etc. would contractually require Hulu, etc. to routinely get accounts with such services, use them to sniff out the IPs and block them. I guess that means proxies aren't (perceived) a big enough threat. Yet.
UPDATE: Just signed up. They do actually seem to redirect the traffic from domains like hulu.com/pandora.com/... to IPs that run a squid proxy. My guess would be that they just redirect the queries for the geo-localization to their squid servers and allow you to pass those that way