How to simulate magnifying glass on Web-page image (Javascript)?

Google has the coolest effects - once it was a Pac-man game, today is apparently the 160th anniversary of the first World Fair, and Google's logo has an image of it. They also turn the mouse into a magnifying glass that can sweep over the picture (the gold ring).

I'm wondering how they do that. It's obviously Javascript, and I looked at the page source, but it's not especially readable (no surprise).