The Tilt-Shift effect is achieved using a special lens that enables "photographer[s] very exacting control over the depth-of-field in an image, much more than any regular lens could provide. Video after the break. First picture in gallery.
..because tilting the lens with respect to the film/sensor plane changes the perspective in the image: you can make lines that otherwise would converge, showing perspective, instead remain parallel or even diverge[via Cheapshooter]
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[Source: Tech Blog]