As explained at Google I/O this morning, the jacket contains a weave of the Jacquard interactive threading on the left arm, and there's a little Bluetooth-enabled loop you connect to the cuff of your jacket. That cuff lets your phone talk to the jacket, and you can configure exactly what gestures you want to work with which apps.
The on-stage demo showed that you can swipe to adjust the volume on your music, tap to change tracks, and use another gesture to get navigation directions from Google Maps. The idea is the built in interactions that bikers can use to control their phones safely while riding, as the Commuter jacket was originally designed as a biking jacket.
The jacket itself is made using Levis' standard manufacturing techniques and it doesn't need to be treated with any special care. It can be washed and worn and treated like any other garment; you just need to remove the Bluetooth cuff before washing it. And it's just the first garment that Levis is making with this tech -- the company wants to make athletic and business wear as well.
Developers will have access to a whole host of APIs to make their apps work with Jacquard, and the hopes are that many apps will work with the garment by the time it ships. Right now it works with your calls and messaging apps, Google Play Music and Maps and third-party apps from Spotify and Strava.
The first Project Jacquard garment will ship from Levis in the Spring of 2017 -- but there's a "beta test" that'll launch in the fall of this year. If it works as well as it seemed to in today's quick demo, it'll definitely be worth keeping an eye on.