I talked to chief evangelist and founder Cory Doctorow by phone and email to obtain some of the details of their architecture. Swarmcast distributes content across multiple systems and provides sophisticated retrieval.
Folders allows people to search for the content they want.
Interestingly, Folders preceded Swarmcast. In other words, the developers started by helping people find content on other systems. They had trouble scaling that service and realized they needed another service to distribute and retrieve the content efficiently. People can request a file from a Web site in the usual manner, but the request is redirected to Swarmcast. The developer is freed from providing the enormous bandwidth and complicated storage networks traditionally required to serve content to a lot of people.