I think this uses the same principal I mentioned in my tut, Matrix encryptin...basicaly it's like having 256 256-keys....then you swap betwenn them, giving you 3D encryption in a sense.
It's possible for the simple reason that it isn't one file...it's many, how ever...cracking it is impossible, because you have to crack it based on the belief that it is one HUGE file.

- Noia