The code uses OpenCV to scan a small line of pixels in the middle of the screen. Colors are extracted from this, and the value of the resistor is displayed on the screen.

As explained by Arduino to Go, each color band on the resistor corresponds to a number but this can differ depending on the band's placement. It's not complicated, but the sheer number of colors ...

"I was talking to Mat Metts about fun ways to read resistor color codes." Metts created a delightful double resistor poster.