In reply to iusedtoclimb:
It used to do this only using the trafficmaster cameras (those thing you see on poles and bridges). But I think others are right, they are pulling info not just from Waze but also general google maps users.
The same way, when you google a shop you can see how busy it is, but Google now gives a "Live" status as well based on how many people are checking in at that location.