Droidgamers.com has the full LG news release. If you already own an LG Optimus 3D, you don’t need to buy a new phone, the 3D Game Converter will be pushed to your phone in an update “starting this October, the exact rollout date determined by each mobile carrier.”
The reason the LG 3D Game Converter can work at all is because a lot of games that use non-stereoscopic 3D graphics use something called OpenGL, which is a programmer’s toolkit for (essentially) making pretty graphics. OpenGL is open-source, like Android is, so anyone including LG can poke around at the code and learn from it.
The 3D Game Converter will take the OpenGL graphics of non-stereoscopic 3d games and make them stereoscopic, even if the game’s programmer didn’t write the game to work with the Optimus’ 3D display. It won’t work on games with cartoony “sprite” graphics, because those are just drawings. But non-stereoscopic 3d OpenGL games already involve 3d models, so all they have to do is let you see them from slightly different angles out of each eye.