Here's an excerpt as well as video from the OC Register article:
"The show is part of Disney parks’ yearlong promotion, “Let the Memories Begin,” to recognize visitors’ recollections of their trips. Visitors also can submit their personal photos and videos on a Disney website. There, Disney chooses some pictures for the park shows and commercials.
Walt Disney World is a running similar show.
The Disneyland show is based on 5,000 preselected photos and videos, said Jennifer Magill, the show producer. The other 500 or so pictures are taken that day by PhotoPass photographers at character-greeting areas and other locations throughout the park.
For the PhotoPass system, Disney photographers take pictures of visitors and upload the photos to a website. Visitors get a card with a code so they can look up and buy their photos online. Read tips on using Disney’s PhotoPass.
Disney assigns about six PhotoPass employees to spot photos that would work in the show as they are being shot, said Alan Bruun, associate creative director of entertainment at Walt Disney World, who worked on shows on both coasts.
For now, photographers stop submitting new photos about 3 p.m. to give show creators time to assemble that night’s show, Bruun said.
The PhotoPass photos are sent to Orlando, where crews put together that night’s show through a computer program.
But the show consists of more than just photos: Animation and effects are projected on the building, making it look like the tiles are moving.
Characters, including pirates and “small world” dolls, go across the screen.
The videos of visitors were chosen beforehand. Disney also made a video, a recreation of a Walt Disney speech, from a collage of guest photos."
