The app makes use of the iPad 2 Smart Cover. I'm sure you know that the cover has magnets which the iPad 2 can detect (that's how it knows the cover is closed or not). The Peek app monitors the magnets, and when you open the cover (like in the photo above) it will flash a question. Open the cover all the way to see the answer.
It can pull the questions from the notebooks your Evernote account, and you can specify which one. Watch the video for more info.