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They are little RFID tags that you put in the end of the grip. The Skycaddie can read what club you are swinging and eventually give you averages of all your clubs. Also will tell you when you left a club on the last hole which sadly I can use.
I have heard that as well JN. I have to be honest I would be pretty peeved if they didn't deliver on that as it was promised before the product came out. Still a great GPS though.
I personally think all of these companies, SkyCaddie included, need to stop the yearly fees. One time up front fee for all courses. Some companies have figured this out, but not SkyCaddie.